Gold Imports To Decline to 400 Tonnes This Year
The revised scheme is also likely to offer 2 per cent interest in gold volume terms on deposits made under the scheme.
Chennai: Jewellers expect gold imports to come down to 400 tonnes this year in value terms and the import bill to shrink by around ₹3 lakh crore due to the curbs on imports. The industry has urged the government to involve jewellers in the Gold Monetisation Scheme (GMS) to bring idle household gold into the formal economy. The revised scheme is also likely to offer 2 per cent interest in gold volume terms on deposits made under the scheme.
The recent increase in gold and silver import duties from 6 per cent to 15 per cent, along with elevated gold prices and the likelihood of a below-normal monsoon affecting rural demand, is expected to significantly reduce imports and consumption this year, said Saiyam Mehra, former chairman of All India Gem and Jewellery Domestic Council (GJC).
“We are seeing a decline of 40 per cent to 65 per cent when it comes to individual stores from last year to this year,” Mehra said, adding that India imported nearly 200 tonnes of bullion between January and April.
According to him, India earlier witnessed annual sales of nearly 750-800 tonnes, comprising about 450 tonnes of jewellery sales, 150-200 tonnes of bullion and coin sales, and 125-150 tonnes of jewellery exports. However, domestic jewellery consumption is now expected to fall from 450 tonnes to around 300-325 tonnes.
Bullion and coin sales are also likely to decline sharply from 150-200 tonnes to nearly 75 tonnes as jewellers actively discourage customers from buying bullion and coins. Jewellery exports, meanwhile, are expected to remain at around 100-125 tonnes.
Mehra said India’s gold import bill, which earlier stood at around $72 billion or nearly ₹7.2 lakh crore, could decline to approximately $35-40 billion, translating to imports worth around ₹4-4.5 lakh crore this year.
Despite the sharp fall in imports, he said the industry’s turnover may not shrink proportionately because recycled gold is expected to play a larger role in meeting domestic demand.
“The industry will remain around ₹7 lakh crore itself because there will be a lot of recycled gold coming into the market,” he said. Families are increasingly expected to sell old jewellery lying unused in households, helping jewellers maintain sales while reducing dependence on imports.
GJC estimates that recycled gold, which stood at around 125-150 tonnes last year, could rise to 200-250 tonnes this year. India is estimated to hold around 34,000-40,000 tonnes of gold in households, and even refurbishing 0.5-1 per cent of that stock annually could generate 350-400 tonnes of recycled gold.
Mehra said the earlier Gold Monetisation Scheme failed because jewellers were not involved directly. The industry has now proposed a revised framework involving banks, demat systems and jewellers to improve customer confidence and participation.
“We are planning to give 2 per cent on the gold value, not on the cash value. If somebody deposits 300 grams, they will get around 6-8 grams additionally,” he said.
The proposal has been submitted to the Finance Ministry and Commerce Ministry, which are expected to review it over the next 30-60 days.
