Reducing import dependence through refining and recycling the way to navigate India Gold sector: Report

New Delhi: India's gold sector is currently undergoing a structural transformation as the industry navigates a shift from consumption-led to investment-led demand. According to a joint report by ICRA and ASSOCHAM, India remains heavily dependent on imports due to negligible domestic mining output.

To address this vulnerability, the joint report emphasised that "reducing import dependence by scaling up organised refining and recycling needs to be prioritised." Key recommendations included continued support for lower import duties on gold dore relative to refined gold and the wider acceptance of IGDS-compliant bars to better integrate domestic refiners with financial markets.

The report also highlighted the need to recalibrate the Gold Monetisation Scheme (GMS), which has seen limited uptake since its inception. Cultural and behavioural factors continue to constrain consumer participation, particularly when sentimental jewellery is involved.


To unlock a larger share of India's idle gold stock, the report suggested "simplifying scheme structures, improving communication on benefits, and leveraging organised jewellers as trusted intermediaries for collection, testing and customer engagement should be considered."

In the financial space, the rapid growth of gold loans reflected an increasing financialization of the metal. Improvements in purity standards and regulatory clarity have boosted lender confidence. "Recent RBI guidelines on valuation, transparency, loan-to-value norms and borrower protection are also positive steps," the report stated.

Additionally, technology adoption is encouraged across the board, with blockchain-based traceability and digital hallmarking seen as tools to "materially improve governance and efficiency" in refining and retail.

The long-term goal for the sector extends beyond domestic consumption. The report envisioned India establishing itself as a global hub for gold refining, trading, and price discovery. By aligning domestic standards with global benchmarks and expanding export-oriented gold products, the country aims to transition from being a price-taker to playing a more influential role. "Collectively, these trends position India to play a progressively larger role in global gold consumption, refining and trade," the report stated.