India Urged to Unlock Vast Gold Reserves Through Financialization
New Delhi, March 25 – India should unlock the vast household gold reserves by encouraging consumers to invest in financial instruments, said former Union Minister P P Choudhary and senior market officials on Wednesday. The move is intended to reduce India’s dependence on bullion imports and ease pressure on the current account deficit.Significant Gold Holdings Outside Formal System
India’s households and temples together hold an estimated 50,000 tonnes of gold, valued at roughly USD 10 trillion, largely outside the formal financial system. This figure was cited by Sriram Krishnan, Chief Business Development Officer at the National Stock Exchange.Push for Electronic Gold Receipts (EGR)
Krishnan urged the government to remove barriers to dematerializing gold through Electronic Gold Receipts (EGR). EGR is a SEBI-backed instrument that allows consumers to deposit physical gold and trade it on stock exchanges like shares. A 3 per cent GST levied when gold is surrendered under the EGR framework remains the key obstacle to wider adoption. The National Stock Exchange has submitted a white paper proposing a solution.Jewelry Sector Remains Robust
Despite surging gold prices, with increases of roughly 30 per cent in each of the past two fiscal years, jewelry demand has remained firm. Major retailers have reported double-digit revenue growth and expanded store counts by around 20 per cent in both fiscal years 25 and 26.Gold Loan Exposure Increases
Gold loan exposure by banks and non-banking financial companies has quadrupled from approximately Rs 1 lakh crore to Rs 4 lakh crore in recent years. This growth reflects increasing consumer demand for gold financing.Regulatory Measures Support Domestic Bullion
Regulatory steps, including mandatory hallmarking and the introduction of Indian Good Delivery Standards, have helped build trust in domestically produced bullion, reducing reliance on imports to some extent. The gems and jewelry sector already contributes around 15 per cent of merchandise exports and employs nearly 5 million people.Disclaimer: Due care and diligence have been taken in compiling and presenting news and market-related content. However, errors or omissions may arise despite such efforts.
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