India’s gold mortgage overload | USAEMALL.com

Good morning from Hong Kong, where the FT’s Asia journalists are in a two-day editorial planning huddle. There’s so much to be excited about! (My personal highlight is meeting India Business Briefing mentor Robin Harding and editor Tee Zhuo for the first time in person).

In today’s newsletter, a “joke” that went too far, leading to new guidelines for video streaming services and platforms. But first, the massive growth in gold loans in India.

Note: On Tuesday, I wrote Beverly Hills Polo Association, instead of Beverly Hills Polo Club, in one instance. Sorry!

Worth its weight

The slowing economic growth rate and rising gold prices in the past year have resulted in a record surge in loans against gold jewellery. Data released by the Reserve Bank of India shows that gold loans grew 68 per cent in the first nine months of this fiscal year, up from 12.7 per cent for the same period last year. 

It is no secret that Indians love the yellow metal and a significant chunk of savings go towards buying jewellery. As the consumption distress in the economy grew for much of 2024, people resorted to pledging their jewellery and securing loans against it. They were further incentivised by the rise in gold prices during the period, helping them to access a higher loan amount for the same quantity of gold. Besides, getting these loans is an easier process, when compared with other unsecured lending products such as personal loans. 

However, the rise in gold loans has also coincided with a higher rate of default on these loans. In November, the RBI flagged serious issues in the disbursement process in these loans, such as using the same collateral for multiple applications, and urged banks to improve their valuation procedures and monitor the end use of the funds. Banks had to assess the lenders’ repayment capabilities and not just take comfort in the fact that this was a secured loan. The concern was that a sharp decline in the price of gold would leave banks holding a lower collateral. So far, those worries have not come true; the global economic uncertainty after Donald Trump’s election victory in the US has resulted in gold prices moving further north.

The real story that is emerging from this data, as well as from other sources such as the How Indians Spend report that I wrote about a few weeks ago, is the amount of debt the Indian middle class is holding. According to the report, people earning above Rs100,000 ($1,147) a month are using up to 46 per cent of their monthly income towards loan repayment. We will take a deeper look at this phenomenon and what it says about the state of the Indian economy soon.

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The lost laugh

A “joke” by Ranveer Allahbadia (aka BeerBiceps) is likely to lead to stricter norms for video streaming and other digital platforms in India.

Over the past few weeks, Allahbadia’s comments on a YouTube show (a joke in terrible taste that I don’t want to repeat here) called India’s Got Latent have found their way to parliament, the information ministry and the Supreme Court. At each point, there have been calls to examine and regulate free speech and broadcast rules. A parliamentary panel has asked the ministry to submit a note on the current regulations and their “efficacy”, and suggest any amendments needed for legislative control of online platforms. 

Earlier this week, during the hearing of the case, the Supreme Court said that fundamental rights came with certain restrictions and asked the government to come up with guidelines to prevent the airing of programmes that were “offensive to well-known moral standards of society”.

That the mood in the legislative and judicial wings is in favour of placing definitive restrictions on speech is certain, but how the guidelines will make digital platforms liable for what they publish remains to be seen. The current advisory has only been sent to streaming platforms, such as Netflix and Amazon Prime. User-generated content sites, such as YouTube, Facebook, X and others have so far managed to escape liability by arguing that they are platforms and not publishers. That distinction is unlikely to leave them with an umbrella cover of protection in the future. Even under the current guidelines, video streaming companies (and Bollywood films) have found themselves having offended viewer sensibilities because of one scene or the choice of name. 

Regulating speech according to “well-known moral standards” is a slippery slope for both individuals and companies, whether they call themselves platforms or publishers. The extent of vulgarity of a joke, or the offence it may cause, are subjective matters that are impossible to codify. Living in a society where you are only one bad joke away from legal action is detrimental to individuals as well as businesses. It stifles creativity and drives up the cost of business. And let’s face it: we are easily offended in India.

Do you think dialogues in television series and comedy shows should be censored? Hit reply or write to me at indiabrief@ft.com.

Go figure

China’s government announced its annual “work report” on Wednesday, which sets out its economic targets for 2025. Here are the headline goals.

Read, hear, watch

In her new podcast, Reclaiming, Monica Lewinsky interviews guests including actress Olivia Munn and journalist Kara Swisher about the traumatic moments of their lives, and how they overcame them. But in its amazing first episode, she talks about herself, and how she managed to turn her life around after hitting global headlines as the 24-year-old intern who was having an affair with the US president. Do have a listen.

Tomorrow is International Women’s Day. I used to get annoyed about the capitalistic tokenism that hijacked the day of its relevance. But now I am happy to drink a free cocktail, or three, to celebrate.

On Sunday, India will play New Zealand in the finals of the ICC Champions Trophy. I am sure your blue T-shirts are laundered, and everyone you know has been tasked to get into whatever viewing position is the most astrologically favourable for a win for India. Good luck!

Buzzer round

What is driving global chocolate prices to historic highs? Hint: it’s happening in Ghana, the world’s second-largest cocoa producer.

Send your answer to indiabrief@ft.com and check Tuesday’s newsletter to see if you were the first one to get it right.

Quick answer

On Tuesday, we asked: How well will India’s manufacturing sector cope with cheaper imports?

This is how you voted.

Thank you for reading. India Business Briefing is edited by Tee Zhuo. Please send feedback, suggestions (and gossip) to indiabrief@ft.com.