Bullion Industry Proposes Innovative Solutions to Optimize India's Gold Reserves
Bullion industry proposes plan to turn India's idle gold into working capital
The Economic TimesImage: The Economic Times
The bullion and jewellery sectors in India are advocating for measures to recycle idle household gold and restrict imports, aiming to reduce the country's gold import bill, which reached $71.9 billion in 2025-26. Proposed strategies include a gold metal loan program and tax incentives to encourage gold deposits and monetization.
- 01India's gold imports surged 24% to $71.9 billion in 2025-26.
- 02The Precious Metals Refineries Forum (PMRF) suggests a gold metal loan (GML) for jewellery exporters.
- 03Over 30,000 tonnes of gold is held by Indian households, much of it idle.
- 04Tax incentives could encourage gold deposits and reduce the burden of GST on conversions.
- 05Collaboration with jewellers is crucial for the success of gold monetization schemes.
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The Indian bullion industry is pushing for a comprehensive plan to leverage the nation's vast gold reserves, estimated at over 30,000 tonnes held by households, to reduce reliance on imports. With gold imports reaching $71.9 billion in 2025-26, the industry proposes several measures to recycle household gold and restrict its end-use to jewellery exports. Key proposals include a gold metal loan (GML) program that would allow jewellery exporters to access loans against imported gold, and tax reforms to incentivize gold deposits by reducing the GST burden on conversions from physical gold to electronic gold receipts (EGR).
Industry leaders emphasize the need for a bankable mechanism that integrates gold deposits and loans, minimizing risks from price fluctuations. Rajesh Rokde, chairman of the All India Gem and Jewellery Domestic Council (GJC), noted that many families hold gold expecting price increases, and tapping into this resource could significantly lower imports. The PMRF has suggested a one-year GML for jewellery exporters and interest rates of 2-2.5% for depositors. Discussions between the Indian Bullion and Jewellers Association (IBJA) and the Reserve Bank of India (RBI) have highlighted the importance of jeweller involvement in these schemes, as past initiatives have struggled without their participation.
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If successful, these initiatives could significantly reduce India's gold import dependency, benefiting the economy by improving the balance of payments.
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