India, June 20 -- The world has become more uncertain, volatile and unforgiving. Assumptions that shaped economic policy for decades are being challenged. India mustnow revisit the belief that a current accountdeficit (CAD) of 1.5-2% of the gross domestic product (GDP) is normal, manageable andperhaps inevitable. This took hold after the 1991 reforms. Liberalisation lifted India from the old 3% growth path to an average growth rate of about 6.5% for three decades. This growth attracted enough global capital in normal times to finance the CAD. So, in the last 35 years, we registered a CAD in 31. Over time, the deficit came to be as a feature of India's growth model, not a vulnerability. The standard argument was simple. India lacked domestic oil and gas, and Indians could not be weaned off the age-old habit of buying gold as a store of value. Rising oil demandafter Y2K did not materially worsen the current account situation because it was offset byIT services exports and rising India-boundremittances. But even then, each time oil prices spiked, we moved from strength to fragility in a heartbeat. The shift in the global economic regime under the present US administration and the war in West Asia have exposed the fragility of India's external account assumptions. The agreement between the US and Iran, if one could call it that, provides two months for both sides to set up the framework for real negotiations. That is when nuclear capabilities, frozen assets, missile capability, support for proxies, and relief from sanctions get discussed. These are contentious issues and any purported agreement could unravel again - underscoring once more India's dependence on fuel imports as a major strategic weakness. At the same time, IT services exports may come under pressure from the AI disruption, while tighter immigration policies compress remittances. Foreign capital tends to retreat when risk rises. A prolonged conflict can raise prices, disrupt supplies, pressure the current account, weaken growth, strain the fiscal deficit situation, stoke inflation and trigger second-order effects. If the rupee depreciates sharply, the Reserve Bank of India will be forced to use foreign currency reserves and interest rates to manage volatility. However, this article is not about short-term crisis management. It challenges the policy belief that India's oil-gas-gold demand structurally condemns it to a CAD. India consumes roughly 2,300 million barrels of oil a year but produces only about 530 million barrels domestically. Estimates of India's oil reserves vary widely, from around 12 billion tonnes of proven reserves to a theoretical potential closer to 42 billion tonnes. Until recently, some reserves could not be explored because of restrictions. The Prime Minister's Samudra Manthan decision is quite welcome, opening up around one lakh square kilometers of coastline for deep-water exploration. But intent must be matched by capital, technology, and incentives. India's oil is harder to access than that of many West Asian producers. Much of it lies offshore; so, domestic wells recover only about 35% on average. Extracting more is often uneconomic because of limited technological innovation. India, therefore, must make serious efforts on exploration, recovery technology, and incentivising risk-taking. ONGC and Oil India must be encouraged to explore, not hamstrung by tight MOUs. India should target raising domestic supply from the current level of roughly 12% of oil demand to 50%. Demand management is the second lever. India must accelerate transport electrification across two- and three-wheelers, cars, and buses. For trucks, liquefied natural gas can be a transition fuel, given India's gas import bill is a fraction of its oil bill. Over time, however, heavy transport too must be electrified. A determined policy pivot will accelerate innovation. India must also reduce dependence on liquefied petroleum gas by expanding piped natural gas networks and encouraging alternative cooking technologies, including induction and solar-powered solutions. Industrial electrification must also be urgently expanded -- currently at around 18%, compared with China's 30%. On fertilisers, with the subsidy bill likely to rise sharply, India should incentivise a shift from natural gas-based ammonia to green ammonia. India's current account strategy must also prioritise reducing dependence on imported oil. The second structural issue is gold. Nilesh Shah and Amit Chandra, using World Gold Council data, have highlighted the scale of the opportunity. India holds around 26,000 tonnes of gold, worth roughly $4 trillion. Of this, about 4,000 tonnes are estimated to be with temple trusts and around 20,000 tonnes with households. The top 10% of households may hold about 10,000 tonnes. Gold prices have surged since 2024, making these holdings seem like excellent investments. But the value remains largely notional unless monetised. The government can roll out a credible national temple gold mobilisation programme, to buy temple gold (at a premium) on the market price, with a buyback option. A sovereign wealth fund of $300 billion could be created with the receipts. The temple trusts would be converting the idle gold into productive national capital, and also get income to make structural and ambient upgrades to the temples and the surrounding areas to boost religious tourism. Illustratively, while the Vatican gets 11 million foreign tourists, all of India gets 9 million of which a large portion are NRI. India should also study Turkey's experiment of allowing banks to hold part of their statutory reserves in gold. This would give banks an incentive to attract household gold. A one-time, no-questions-asked gold conversion window could also be considered. India cannot continue to treat a CAD as an unavoidable cost of growth. A CAD may be manageable in benign times, but in a fractured world, where black swan events are becoming the new normal, it is a strategic vulnerability. Challenging an old policy belief on CAD and bringing it to surplus must be a central focus to India's economic policy in the years ahead....