India’s domestic gold jewellery consumption is expected to grow by 12–14% in value terms in FY2026, according to a new report by ICRA, even as consumption volumes are projected to decline for a second year in a row. This value growth is largely attributed to continued gold price appreciation, expanded retail presence, and increasing market consolidation in favour of organised players.

“This will be supported by continued gold price appreciation, planned retail expansion, and market share gains from the unorganised segment. A higher number of auspicious days in the fiscal is also expected to lend some support to demand, despite elevated prices and declining volumes,” said Jitin Makkar, Senior Vice President and Group Head, ICRA.

In FY2025, gold jewellery consumption by value jumped 28%, spurred by a 33% surge in gold prices. A similar trend is anticipated in FY2026, with gold prices already trading about 20% higher than the FY2025 average. However, consumption volumes are expected to fall by 9–10% in FY2026, following a 7% decline in FY2025.

The report also highlights a notable shift in investor behaviour, with demand for gold bars and coins increasing 17% and 25% in FY2024 and FY2025, respectively. This reflects a growing preference for gold as a safe-haven asset amid global geopolitical and economic uncertainty. ICRA expects this demand to rise by another 10% in FY2026, with bars and coins projected to account for 35% of total gold demand.

Jewellery retailers may also see a modest improvement in profitability. Operating margins are forecast to expand by 30 basis points to 7.2% in FY2026. However, net margin growth is likely to remain limited, constrained by higher financing costs linked to elevated Gold Metal Loan (GML) rates and increased working capital needs due to high gold prices and planned store expansions.

“Despite a projected 30 bps expansion in operating margins in FY2026, net margin expansion will remain limited within 10 basis points due to higher financing costs stemming from elevated GML rates and increased working capital borrowings driven by high gold prices and planned store additions,” Jitin Makkar added.