National News
India’s Gold Consumption Seen Falling 12% in 2025 as Prices Weigh on Jewellery Demand: WGC
Soaring gold prices curb jewellery buying, while investment demand stays resilient; lightweight 22-karat jewellery remains preferred.
India’s gold consumption is projected to decline 12% this year to 650–700 tonnes, down from 802.8 tonnes in 2024, as a sharp rise in prices dampens demand in one of the world’s largest bullion markets, according to the World Gold Council (WGC) India.
Gold prices have surged over 65% since January, pushing the retail price to around Rs.1,32,394 per 10 grams. Elevated prices have strained affordability, particularly for jewellery buyers, even during the peak wedding season.
Despite higher prices, consumers continue to prefer 22-karat lightweight plain gold jewellery, rather than shifting to lower-karat options such as 18K, 14K, or 9K—despite the availability of hallmarking for these categories. “Indians will take time to shift to lower-karat gold jewellery,” said Sachin Jain, CEO, WGC India.
Gold demand shows a clear divergence: investment demand remains strong, while the jewellery segment is under pressure. Industry feedback indicates year-on-year declines in jewellery volumes as higher prices curb consumption. India’s total gold consumption stood at 462.4 tonnes during January–September, WGC data showed.
In value terms, gold imports rose 2% year-to-date to $55 billion, but volumes fell by about 20% to ~580 tonnes, underscoring that value growth is price-led rather than volume-driven. Mid- and small-ticket segments—critical to mass demand—remain particularly impacted.
High net-worth individuals have continued buying heavier gold pieces (100–400 grams), attracted by the ongoing price rally, though this has not been sufficient to offset broader volume weakness. Price volatility is also constraining discretionary and everyday jewellery purchases.
Retail performance reflects this split: large and mid-sized jewellers are reporting relatively healthier sales supported by higher ticket sizes and wedding-led purchases, while small and standalone jewellers face mounting pressure.
Meanwhile, investment-focused buying—especially bars and coins—continues to gain traction. Gold imports for investment surged to 340 tonnes between July and October, up from 204 tonnes between January and June, with even entry-level consumers opting for coins amid the sustained price rally.
source: World Gold Council
National News
Gold Industry Proposes New Strategy To Cut Imports and Boost Local Economy
Precious Metals Refineries Forum (PMRF) Has Proposed A Two-Track System To Manage Gold More Efficiently
Following Prime Minister Narendra Modi’s call to reduce gold imports and foreign travel, major Indian bullion and jewellery bodies have submitted a new plan to the government and the Reserve Bank of India (RBI). The strategy aims to lower the nation’s trade deficit by tapping into the estimated 30,000 tonnes of gold sitting in Indian households.
This move comes after India’s gold imports jumped 24% to a record $71.9 billion in the 2025-26 financial year, with over 721 tonnes of gold brought into the country.
The New Strategy: Two Separate Systems
The Precious Metals Refineries Forum (PMRF) has proposed a two-track system to manage gold more efficiently:
- For Exporters: Imported gold should be strictly saved for jewellery exporters using one-year Gold Metal Loans (GML).
- For Local Buyers: Domestic demand should be met entirely by recycling household gold. This gold would be collected from citizens, refined locally, and sold back through jewellers and retailers.
Under this plan, people who deposit their idle gold could earn 2% to 2.5% interest, while businesses taking gold loans would pay an interest rate of 3% to 4%.
Fixing Why Past Schemes Failed
Previous government gold schemes failed to gain traction primarily because they left out local jewellers and lacked a proper banking structure. Without a joined-up system, institutions faced high financial risks from changing gold prices.
To fix this, trade bodies are calling for a complete system that includes:
- Direct involvement of trusted local jewellers. The schemes did not take off in the past because jewellers were not part of them. About 10% to 20% of family gold is held as bars or coins.
- Strong bank backing and secure storage vaults across the country.
- Tax incentives, such as removing the 3% GST loss when physical gold is converted into Electronic Gold Receipts (EGR), and offering income tax relief on the interest earned.
Industry Support
Industry experts say a smooth system is already possible. Collection and purity testing centres have confirmed that collected household gold can be processed within 48 hours and safely moved to secure, bank-approved vaults.
Representatives from the Indian Bullion and Jewellers Association (IBJA) recently held discussions with RBI officials to fast-track these changes.
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