New Delhi: Total consumer demand for gold in India rose to 802.8 tonnes in 2024, accounting for 26 percent of the global gold demand. This positions India in second place, just behind China, which had a consumer demand of 815.4 tonnes, according to a report by SBI Research.
The domestic supply of gold in India is quite limited, with imports making up approximately 86 percent of the total supply in 2024, as estimated by the World Gold Council. Gold imports increased by about 31 percent in FY24 and by 27 percent in FY25.
However, rising prices have resulted in decreased gold demand in 2025. In the third quarter of 2025, consumer demand fell by approximately 16 percent compared to the same period the previous year, largely due to a decline in jewellery demand, as noted in the report by Dr Soumya Kanti Ghosh, Group Chief Economic Advisor at SBI.
The increase in gold prices also led to a 9 percent reduction in gold imports, which amounted to $26.5 billion during the April-September period of FY26, down from $29 billion during the same period in FY25.
“Another interesting trend visible is the increase in gold reserves by the central banks. The RBI gold reserves rose to 880 tonnes in 2025 as part of strategic reserve management,” said Dr Ghosh.
Gold’s return matches the equity market (Sensex) over 5, 10, and 15 years but outperforms it over 1 and 3 years.
“Furthermore, the recent discoveries of new gold mines in various districts of Odisha as Deogarh, Keonjhar, Mayurbhanj (with an estimated 1,685 kg of gold ore detected by the GSI) among others, Jabalpur in Madhya Pradesh (estimated quantity could run into lakhs of tonnes) and Kurnool district in Andhra Pradesh (India’s first large private gold mine expected to produce 750 kg of gold annually) could help ease the pressure on imports and are positive for our current account balance,” the report noted.
The government began issuing Sovereign Gold Bonds (SGBs) in November 2015 and has since conducted 67 tranches, with the most recent one issued in February 2024.
As of October 23, the total outstanding SGBs amount to 125.3 tonnes. Considering the redemption price of ₹12,704 announced for the 2017-18 Series IV, the total cost to the government is estimated to be ₹1.59 lakh crore.
“When the issue of these units is taken into account, it amounts to Rs 65,885 crore. Thus, it amounts to Rs 93,284 crore loss to the Government on account of an increase in gold price,” the report noted.
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Caption : Shimla: People purchase gold jewellery on the day of Dhanteras in Lower Bazaar, Shimla, on Saturday, September 18, 2025. (Photo: IANS)
—IANS
