MMTC PAMP calls for better Gold Monetisation Scheme

Kolkata: India needs to make gold recycling more attractive to unlock household stocks and reduce dependence on imports, said Samit Guha, managing director of MMTC PAMP, the country's only gold-refining unit accredited by the London Bullion Market Association.

Indian households are estimated to hold 31,000 tonnes of gold. The country imports about 800 tonnes annually

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A more lucrative gold monetisation scheme could bring some of that metal into the formal market, boosting recycling and helping revive underused refining capacity, Guha said. India has about 1,800 tonnes of installed gold-refining capacity, much of which remains underutilised. The government is working with all stakeholders to develop a revamped gold monetisation scheme (GMS), after the earlier programme launched in 2015 made little headway.

MMTC PAMP currently recycles around 22 tonnes of gold and plans to increase this by 10-15% annually, he said. "If an attractive GMS is launched, then it can go up substantially." The company has the capacity to refine 300 tonnes of gold and 600 tonnes of silver annually, leaving significant headroom to scale up recycling.

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A greater flow of recycled gold into the domestic market could also help address pressure on India's current-account deficit by substituting a portion of imported bullion with domestically sourced metal. With gold accounting for a significant share of India's merchandise imports, recycling household gold could reduce the need for fresh imports and, consequently, the outflow of foreign exchange. "Recycling complements imports; it does not replace them," Guha said, adding that India's next gold story should be about how efficiently, transparently and responsibly the country circulates and monetises the gold it already owns.