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India has always held competition with China to be the world's top consumer of bullion. In order to get advanced in the race, India is now working on new policies that would improve transparency and help expand the $19 billion gold jewelry industry that it has. The finance and commerce ministries are presently working on these plans, along with industry groups, which should be finalized by the end of this financial year. These plans include launching a spot bullion exchange and reduction in the present import tax of 10%, while a dedicated bank for the jewelry industry is also under consideration. Presently, India's gold jewelry industry is muddled and mismanaged, which is why it’s unable to maintain confidence among consumers. However, buying and gifting gold is deep rooted in India’s culture, which is why a little push in the industry would enhance people’s trust in quality standards. Consumption of <keyword id="606914" type="UNKNOWN" weightage="100" keywordseo="gold-in-india">gold in India</keyword> is projected to rise to between 850 and 950 tons by 2020, from the present estimate of 650 to 750 tons. "The gold supply chain should become more transparent and efficient, and the tax reform could boost economic growth, which we see as supporting gold demand," <keyword id="113718" type="ORGANIZATION" weightage="100" keywordseo="World-Gold-Council">World Gold Council</keyword> told <a href="https://www.bloomberg.com/news/articles/2017-06-15/india-said-to-plan-gold-policy-overhaul-for-19-billion-sector">Bloomberg</a>. Other than the plans mentioned above, the government is also willing to convince people to recycle their jewelry so that imports can be reduced.

Government working on new plans for gold policy revamp

Mumbai, <keyword id="19895063" type="General" weightage="20" keywordseo="india" source="keywords">India</keyword>'s gold demand witnessed on-year decline of 3 per cent at 747.5 tonnes in 2023, and going ahead the spurt in demand could be anywhere between 800-900 tonnes, if prices hold out and are not significantly volatile, the <keyword id="20195223" type="General" weightage="20" keywordseo="world-gold-council" source="keywords">World Gold Council</keyword> said in a report. The country's total gold demand stood at 774.1 tonnes in 2022, according to the World Gold Council (<keyword id="20256712" type="General" weightage="20" keywordseo="wgc" source="keywords">WGC</keyword>) Gold Demand Trends report 2023. "India's gold demand in 2023 declined by 3 per cent to 747.5 tonnes, strongly influenced by rising gold prices. Although consumer interest remained high, it lagged trade sentiment. October's price correction during <keyword id="20023931" type="General" weightage="20" keywordseo="navratri" source="keywords">Navratri</keyword> stimulated a robust consumer response, boosting Diwali sales in November. "However, demand declined in December as gold prices resumed an upward trend, resulting in a 9 per cent drop in fourth quarter jewellery demand compared to the same period of 2022," <keyword id="20399154" type="General" weightage="20" keywordseo="wgc-regional" source="keywords">WGC Regional</keyword> CEO, India, Somasundaram PR told PTI. Price of gold was volatile throughout 2023, with the yellow metal reaching a new high of Rs 61,845 per 10 gm on May 4 in the domestic market and USD 2,083 an ounce in global markets, and this trend continued with the precious metal reaching another high of Rs 61,914 per 10 grams in November 16. Looking forward to 2024, India's gold demand should benefit from ongoing positive economic conditions and if the prices hold out are not significantly volatile there is likely to be a big spurt in demand which could be anywhere between 800-900 tonnes, he said. "The subdued demand range of 700-800 tonnes since 2019 attributable to continuous rise in prices, increase in duties, stock market outperformance, near-term elections spending impact and acceptance of elevated price levels, suggest the potential for a spurt in demand in the near future. However, any short-term impediments to higher demand could arise from another round of sharp price hikes and volatility triggered by global factors," he added. The total jewellery demand in India dropped by 6 per cent to 562.3 tonnes in 2023, compared to 600.6 tonnes in the previous year, the report stated. Meanwhile, the total gold investment demand in the country grew by 7 per cent to 185.2 tonnes, compared to 173.6 tonnes in the previous year, the WGC report said. "Bar and coin investment in India rebounded, growing by 7 per cent to 185 tonnes year-on-year. The fourth quarter demand touched 67 tonnes, 64 per cent above the five-year quarterly average. "The correction in gold prices led to some robust investment responses in third and fourth quarters, supported by increased interest from physically backed gold ETF investors, setting total holdings in Indian-listed products to a record 42 tonnes by year-end," Somasundaram said. He said that recycling was 20 per cent higher due to low and supportive higher prices but at 117 tonnes, could be considered the normative expected level. Total gold imported to India in 2023 was 780.7 tonnes, up by 20 per cent compared to 650.7 tonnes in 2022, according to the report. "Net gold imports surged by 20 per cent to 780.7 tonnes in 2023, primarily due to substantial inventory building by the trade. "In 2024, gold imports are likely to be higher than the demand. The various Free Trade Agreements (FTAs) India has inked with many countries are expected to boost gold imports further this year," noted Somasundaram.

India's gold demand dips 3% in 2023 on high prices: World Gold Council

<keyword id="19895063" type="General" weightage="20" keywordseo="India" source="keywords">India</keyword>'s <keyword id="19978688" type="General" weightage="20" keywordseo="gold-demand" source="keywords">gold demand</keyword> rose 8 per cent annually to 136.6 tonne in the March quarter helped by a strong <keyword id="21477327" type="General" weightage="20" keywordseo="economic-environment" source="keywords">economic environment</keyword> despite prices touching historic highs, according to the <keyword id="20195223" type="General" weightage="20" keywordseo="World-Gold-Council" source="keywords" meta.keywordsubtype="org" meta.entityname="World Gold Council" meta.hostid="261" meta.entityid="World Gold Council">World Gold Council</keyword>. The aggressive gold buying by the Reserve Bank of India (<keyword id="19899808" type="General" weightage="20" keywordseo="RBI" source="keywords">RBI</keyword>) also contributed to the rise in demand. India's gold demand in value terms rose 20 per cent on an annual basis to Rs 75,470 crore during the January-March period of this year on volume growth as well as a rise in quarterly average prices by 11 per cent. On Tuesday, the World Gold Council (WGC) released its global report 'Gold Demand Trends Q1 2024', showing that India's total gold demand, including both jewellery and investment, increased to 136.6 tonne in January-March this year from 126.3 tonne in the year-ago period. Out of the total gold demand, the jewellery demand in India increased 4 per cent to 95.5 tonne from 91.9 tonne. The total investment demand (in the form of bar, coin among others) grew 19 per cent to 41.1 tonne from 34.4 tonne. Sachin Jain, Regional CEO, India, WGC, said the rise in gold demand reaffirms Indians' enduring relationship with gold. "India's continued strong macroeconomic environment was supportive for gold jewellery consumption even though prices reached a historic high in March leading to a slowdown in sales as the quarter ended," he added. Jain expects the gold demand in India to be in the range of 700-800 tonne during this year. If the price rally continues, he said the demand could be at the lower end of this range. In 2023, the country's gold demand was 747.5 tonne. Asked about the factors driving demand growth in January-March, Jain told PTI, " Historically, eastern markets of the world including India and China respond when the prices are going down and there is a fluctuation, whereas western markets respond when the prices are going up." "For the first time we have seen a complete reversal where Indian and Chinese markets have responded to an increase in prices of gold," he said. Jain said the demand for jewellery as well as investment products like bar, coin and ETF has gone up. "The second reason for the increase in demand has been the buying by the central bank RBI," he said. While the RBI bought 16 tonne of gold in the full 2023, it has already purchased 19 tonne in the first quarter of this calendar year, Jain highlighted. He mentioned that the RBI has indicated that it would continue buying. Asked about the outlook for the April-June quarter, Jain said the demand might slow down due to a sharp rally in gold prices and the ongoing election process. As per the WGC data, India's gold demand in value terms rose 20 per cent to Rs 75,470 crore from Rs 63,090 crore. Out of this, the jewellery demand grew 15 per cent to Rs 52,750 crore from Rs 45,890 crore, while gold investment demand went up 32 per cent to Rs 22,720 crore from Rs 17,200 crore. The WGC also mentioned that the total gold recycled in India stood at 38.3 tonne in January-March, up 10 per cent from 34.8 tonne in Q1 2023. "Total gold imports in India in Q1 2024 was 179.4 tonne, up by 25 per cent compared to 143.4 tonne in Q1 2023," the Council said. The average quarterly price in Q1 2024 was Rs 55,247.20 per 10 gm of gold as against Rs 49,943.80 per 10 gm in Q1 2023 (without import duty and GST) "Q1'24 also saw healthy levels of gold bar and coin demand in India, up 19 per cent year-on-year at 41 tonne. This was on a par with Q1'22, which was itself the strongest first quarter since 2014," Jain said. The price correction in February sparked investors' interest, with anticipation of a rebound driving purchases, he added. "As the price rallied to successive record highs, investors remained bullish, contributing to the robust demand," Jain said. Investments into gold ETF too saw positive inflows of over 2 tonne. "Although Indian recycling volumes increased 10 per cent to 38.3 tonne in Q1'24, there were very few reports of distress selling. With a strong economy and expectations of a normal-to-good monsoon, there seems little desire to cash in on high gold prices at the moment," Jain said. The current high gold prices might temporarily put a strain on demand, he said. However, Jain said, "strong cultural and seasonal factors such as festivals, weddings helped by an expectation for a better monsoon and solid economic growth would support demand." 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India's gold demand up 8% in Jan-Mar to 136.6 tonne despite high rate

India's gold and silver imports from its free trade agreement (FTA) partner UAE have skyrocketed 210 per cent to USD 10.7 billion in 2023-24 and there is a need to potentially revise the concessional customs duty rates under the pact to mitigate the arbitrage driving this surge, a report said on Monday. Economic think tank Global Trade Research Initiative (<keyword id="15910220" type="General" weightage="20" keywordseo="GTRI" source="Orion">GTRI</keyword>) said this sharp rise in gold and silver imports is primarily driven by import duty concessions granted by India to the UAE under the India-UAE Comprehensive Economic Partnership Agreement (CEPA). India allows 7 per cent tariffs or customs duty concessions on import of unlimited quantities of silver and a 1 per cent concession on 160 metric tonnes of gold. CEPA was signed in February 2022 and implemented in May 2022. Additionally, India facilitates gold and silver imports by allowing private firms to import from the UAE through the India International Bullion Exchange (IIBX) in Gift City. Previously, only authorised agencies could handle such imports, the report said. "While India's total imports from the UAE fell 9.8 per cent from USD 53.2 billion in FY23 to USD 48 billion in FY24, imports of gold and silver skyrocketed 210 per cent, from USD 3.5 billion to USD 10.7 billion," it said. "Import of all remaining products fell 25 per cent, from USD 49.7 billion in FY23 to USD 37.3 billion in FY24," it said. GTRI Founder Ajay Srivastava said the current import of gold and silver from the UAE is unsustainable as the UAE does not mine gold or silver or add sufficient value to imports. "High import duties in India on gold, silver, and jewellery at 15 per cent are at the root of the problem. Consider lowering tariffs to 5 per cent. This will cut large-scale smuggling and other misuse," Srivastava said. Trade in gold, silver, and diamonds has been prone to misuse due to their low volume but high value and high import duties in India. Low tariff imports of gold, silver only benefit few importers who keep all profits arising through tariff arbitrage and never pass it to consumers, he said. Srivastava suggested the government implement certain measures to help India balance its <keyword id="21681862" type="General" weightage="20" keywordseo="trade-policies" source="keywords">trade policies</keyword>, protect domestic revenue, and ensure fair competition in the import of precious metals and jewellery. It suggested reassessing and potentially revising the concessional duty rates under CEPA to mitigate the arbitrage driving the surge in imports of gold and silver. "At least, implement yearly import quotas (tariff rate quotas) for silver, similar to those for gold, to control the volume of imports and prevent revenue loss," it said, adding that India should rigorously verify the claimed value addition by Dubai-based refiners in gold and silver imports to ensure compliance with CEPA rules of origin. It also asked to tighten regulations around the India International Bullion Exchange (IIBX) at Gift City to control the volume and nature of <keyword id="22080399" type="General" weightage="20" keywordseo="precious-metal-imports" source="keywords">precious metal imports</keyword> and the exchange should not allow country-based exemptions. As increased imports contribute to a higher current account deficit and since gold and silver act more like financial instruments than regular trade items, India should avoid including them in any FTA. "India has granted <keyword id="20542001" type="General" weightage="20" keywordseo="tariff-concessions" source="keywords">tariff concessions</keyword> for these items in many FTAs and under the DFTP (duty-free tariff preference) scheme, so a comprehensive review is needed. India announced the scheme for LDCs (least developed countries) in 2008. Under this, India provides duty free/preferential market access on about 98.2 per cent of India's tariff lines (or product categories). Further, the report stated that silver imports from the UAE increased multifold to USD 1.74 billion in 2023-24 from a meagre USD 29.2 million in 2022-23 due to India charging an 8 per cent duty under the CEPA versus a 15 per cent duty from other countries. "The large 7 per cent tariff arbitrage resulted in a loss of revenue for India of Rs 1,010 crore in FY24. Revenue loss will increase as India has committed to make tariffs zero on unlimited quantities of silver from the UAE within next 8 years," it added. It said this trade is unusual because the UAE just imports large silver and gold bars, melt and convert these into silver grains and unwrought gold for exports. "A check with global refiners will show that value addition in such process is much less than 1 per cent as opposed to 3 per cent required under the FTA," it said. On gold bars, the report said India agreed to import 200 metric tons of gold annually from the UAE with a 1 per cent tariff concession and due to this gold imports rose 147.6 per cent from USD 3 billion in FY23 to USD 7.6 billion in FY24, causing India to lose Rs 635 crore in revenue in FY24. Similarly, India's jewellery imports have increased 187.6 per cent from USD 1.1 billion in FY23 to USD 3.3 billion in FY24, whereas these imports from the UAE have increased 290 per cent from USD 347 million in FY23 to USD 1.35 billion in the last fiscal.

Gold, silver import from UAE surged 210% in 2023-24; Need duty revision in FTA: GTRI

New Delhi, Jan 17 () India's gold loan market is expected to reach Rs 4,617 billion by 2022 at a five-year compounded annual growth rate of 13.4 per cent, a KPMG report said.
 The 2018-19 fiscal year saw gold loan companies aggressively expanding their branch network across the northern and eastern states in the country, it said.
 "Moving forward, these companies are expected to focus on optimising their asset utilisation and leveraging their existing branch infrastructure to maximize the branch-level AUM and customer outreach," KPMG India said in the report 'Return of gold financiers in India's organised lending market'.
 The emergency of the online and digital models in the gold loan space by NBFCs and new-age fintech players that offer gold loans at the customers' doorstep have opened up an untapped market among digitally enabled customers, it said.
 The industry incumbents are expected to "invest more" in developing "digital onboarding capabilities" that are critical to capturing this segment of tech-savy customers, it added.
 The organised gold loan market comprising of banks, Non-Banking Financial Company (NBFCs) and Nidhi companies contribute to nearly 35 per cent of Indian gold loan market.
 According to the report, today's gold loan companies are competing not just against other players but against financial services providers too.
 While the size of the unorganised gold loan sector, which is estimated to be three times the size of the organised sector, may imply significant growth potential and it is actively being encroached upon by financial services players that offer unsecured loans, it said.
 In the last few years, the major gold loan players have achieved geographical saturation and are now exploring other financial products such as microfinance and SME loans to maintain growth.
 The report further said that customers who previously had to pledge gold to fund their emergency cash shortages, consumer durable purchases and holidays now have a risk-free avenue to source funds without providing any collateral.
 "Lenders today are partnering with fintech companies to leverage the advancement in technology for developing enhanced underwriting capabilities that are agnostic to the availability of customer credit history," it said.
 With the arrival of more robust technological platforms and underwriting systems, the utilisation of unsecured loan products such as personal loans, credit card loans and consumer durable loans has been growing in popularity, it added.
 Noting that the key challenges faced by gold loan market are gold price volatility and liquidity stress in NBFCs, the KPMG report said as 2019 saw prices of the precious metal reaching an all-time high, gold loan companies will be "more conservative" in their approach towards disbursing loans until prices stabilise.
 These companies will continue to promote low loan to value (LTV) ration and low-tenure loans so that the risk of volatility in gold prices is reduced and prevent an LTV breach, it said.
 Although global gold prices are forecast to reduce over the long term, the gold loan market is expected to demonstrate high growth potential as banks are becoming more selective and stringent in credit disbursement. Unlocking new geographies, such as the northeast, will also add to the growth story, it added.
 According to the report, gold loan NBFCs will continue to be frontrunners in this journey equipped with quicker decision-making, faster adoption and capturing new markets will give them a natural advantage compared to banks.
 KPMG in India, however, sees banks tackling this by operating gold loan-specific branches and channels to give the NBFCs a strong fight, the report added. LUX LUX MR
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India's gold loan mkt to touch Rs 4,617bn by 2022

<ul><li>Gold prices are falling for the third consecutive week as the Indian economy recovers and the number of COVID-19 cases decline.</li><li>The diminishing value of the yellow metal is good news for customers looking to buy up gold ahead of the summer wedding season and <keyword id="126295" type="ORGANIZATION" weightage="20" keywordseo="Akshaya-Tritiya">Akshaya Tritiya</keyword>.</li><li>Jewellers are optimistic that the fall in the price of gold and the upcoming festival season will drum up demand for the physical product.</li></ul>Gold prices are finally falling after a year of being on the rise. And, people in the world’s biggest market for gold, India, are taking advantage of the opportunity. Benchmark gold futures in the country have dropped 20% from a record high in August last year of ₹56,200. They are basically a deal to trade gold at terms decided now but with a settlement date in the future. Moreover, as compared to the beginning of 2021, gold prices are down by over ₹5,000 from highs of ₹48,500. This means the precious metal has technically entered bear territory. “Gold prices fell for the third consecutive week as risk on sentiments kept investors away from precious metals,” said HDFC Securities in its report dated March 8. For consumers, there couldn’t be better news with the summer wedding season just around the corner and Akshaya Tritiya — pegged as an auspicious day to buy gold — falling on May 14. Why is the price of gold falling? Simply put, consumers are no longer looking for a safe haven store of currency. During the coronavirus pandemic, the markets were volatile and rates offered by banks were sub par, giving gold the edge over others as a store of value. Now that the number of COVID-19 cases are slowing down and the economy is on the track to recovery, gold prices are coming back down. Investors are instead putting money into US government gold yields to earn higher returns. “Gold prices declined on a stronger dollar as traders and investors switched to the best alternative to gold.” noted HDFC Securities. As a result, the dollar index rose by 1.2%. Government officials told <a href="https://www.bloombergquint.com/global-economics/gold-s-slump-boosts-indian-buying-ahead-of-wedding-season">Bloomberg</a> that imports have jumped 41% in February to the highest that they’ve been since November 2019, which is another indicator of demand coming back. It’s time to buy up gold Last year may have been stellar to buy gold on the commodity exchange, but physical consumption was in the pits. According to the World Gold Council (WGC), the demand for jewellery plunged by 34% in 2020 as compared to the year before. Now, the demand for physical gold is seeing an uptick as prices dip to a near one-year low. It also helps that the Modi administration reduced import duty on the yellow metal from 12.5% to 7.5%. "GJC had been representing this concern for many years and we are glad that the government has acknowledged it and reduced the import duty," said chairman of All India Gem and Jewellery Domestic Council (GJC) in a statement. Lower prices, however, are only one part of the picture. In India, gold holds an important place in Indian weddings and the summer wedding season is set to occur between mid-April to May. Jewellers are also hoping that Akshaya Tritiya — the second-most auspicious day to buy gold for Hindus after Dhanteras — will also lead to a surge in demand. “The festival and wedding looks good. The investment demand has come back, and the jewelry demand will come in after the rates stabilize,” said Ashish Pethe, chairman of the All India Gem and Jewellery Domestic Council in a <a href="https://www.bloombergquint.com/global-economics/gold-s-slump-boosts-indian-buying-ahead-of-wedding-season">statement</a>. He believes that the demand will also see a boost since a lot of weddings that were postponed in 2020 due to the coronavirus pandemic will be scheduled for 2021. Brokerage HDFC Securities expects gold prices to remain low in the coming week, unlikely to dip below ₹44,000 per 10 grams. Analysts believe the rates of precious metal may continue to fall given the sharp recovery in economic activity and a slowdown in COVID-19 infections. However, gold could turn bullish again if central banks choose to step in. Sovereign debt for all countries has increased during the pandemic and the balance sheets are bloated in the face of public expenditure. “We do not think yield will sustainably rise given the fact that governments do not favour higher yields on their accumulated gigantic debt,” said the lead analyst of institutional equities at YES Securities, Hitesh Jain. Rising rates of yields — the interest rate that the government has to pay out for borrowing money from the market — is not favourable with high debt. 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Gold prices are falling and the world’s biggest market for the yellow metal is hoping for more shoppers

After a 10.2% increase last year, <keyword id="19910265" type="General" weightage="100" keywordseo="gold-prices" source="keywords">gold prices</keyword> are expected to rise another 9.9%, <keyword id="22706139" type="General" weightage="20" keywordseo="Infomerics-Ratings" source="keywords" meta.keywordsubtype="org" meta.entityname="Infomerics Ratings" meta.hostid="261" meta.entityid="Infomerics Ratings">Infomerics Ratings</keyword> said in a report, attributing largely to the <keyword id="20132853" type="General" weightage="20" keywordseo="Middle-East-crisis" source="keywords">Middle East crisis</keyword> involving Iran and Israel. The dragged <keyword id="20130144" type="General" weightage="20" keywordseo="geopolitical-crisis" source="keywords">geopolitical crisis</keyword> in the Middle East has spurred a rush into safe-haven assets such as gold. Historically, gold, as an asset, is considered a haven as it typically manages to retain or appreciate its underlying value in times of turbulence. "But this rise would now partly be offset by the reduced duty cut (in India)," said the Infomerics Ratings report. Historical trends, such as the surge during the Russia-Ukraine war, highlight gold's role as a safeguard against inflation and market instability during <keyword id="19982403" type="General" weightage="20" keywordseo="global-uncertainties" source="keywords">global uncertainties</keyword>. Prices of gold, considered safe investment bets, have seen a mild correction after the latest stellar bull run. Gold has been in demand for a considerable period, with its prices rallying to hit record highs now and then. Geopolitical conflict in West Asia that stretched for a long time, buying by several central banks, including the RBI, and physical demand, have altogether pushed gold prices northwards. Gold is a scarce commodity, and any mismatch in demand-supply conditions may invariably trigger a sharp price rise. "Gold's diverse uses, in jewellery, technology and by central banks and investors, mean different sectors of the gold market rise to prominence at different points in the global economic cycle. This diversity of demand and self-balancing nature of the gold market underpin gold's robust qualities as an investment asset," said Infomerics Ratings. Festive season buying, a weak dollar, uncertainty surrounding the US elections, and possible Fed rate cuts in September could raise prices, the report noted. In the wake of the presentation of the <keyword id="19908389" type="General" weightage="20" keywordseo="Union-Budget" source="keywords">Union Budget</keyword> on July 23, 2024, by the Finance Minister, gold prices in India declined sharply. Finance Minister Nirmala Sitharaman slashed the import duty on gold from 15% to 6% in the Budget presented on July 23. Days after the Budget, gold became cheaper by Rs 6,200 in most states of India. In the capital Delhi, the price of 10 grams of 24 carat gold came down to about Rs 69,140. "With surging demand for gold, especially as the <keyword id="19896655" type="General" weightage="20" keywordseo="wedding-season" source="keywords">wedding season</keyword> approaches, gold prices are likely to rise this financial year, driven by escalating geopolitical tensions, robust central bank buying, and expectations of <keyword id="21050688" type="General" weightage="20" keywordseo="US-Fed-rate-cuts" source="keywords">US Fed rate cuts</keyword>." Infomerics Ratings report said. In India, gold has strong cultural and religious significance. As per <keyword id="20195223" type="General" weightage="20" keywordseo="World-Gold-Council" source="keywords" meta.keywordsubtype="org" meta.entityname="World Gold Council" meta.hostid="261" meta.entityid="World Gold Council">World Gold Council</keyword>, India is one of the largest consumers of gold jewellery, accounting for about 25% of global gold demand. The demand for gold in India is primarily driven by weddings and festivals, making it an integral part of the country's culture and traditions. Touching upon regulatory structure and challenges in the gold sector, the report noted that the regulatory landscape for the gold industry in India is fragmented. "The regulatory landscape for the gold industry in India is fragmented, involving multiple circulars and notifications from various authorities such as the RBI, Ministry of Finance, Ministry of Commerce, DGFT, Customs, and others. This patchwork of regulations leads to confusion, inefficiency, and difficulty in compliance, as stakeholders must navigate through numerous documents to understand the rules," the report read.

Gold shines as demand for safe haven asset strong; Infomerics Ratings anticipates 10% price jump this year

The <keyword id="21627536" type="General" weightage="100" keywordseo="gold-loan-market" source="keywords">gold loan market</keyword> in <keyword id="19895063" type="General" weightage="20" keywordseo="India" source="keywords">India</keyword> is on the cusp of substantial growth, driven by rising per-gram gold rates and increasing customer demand. Currently, the market is predominantly controlled by the <keyword id="21485305" type="General" weightage="20" keywordseo="unorganized-sector" source="keywords">unorganized sector</keyword>, which holds a 63 % share, while <keyword id="22789155" type="General" weightage="20" keywordseo="organized-players" source="keywords">organized players</keyword>, including banks and Non-Banking Financial Companies (<keyword id="19938300" type="General" weightage="20" keywordseo="NBFCs" source="keywords">NBFCs</keyword>), account for the remaining 37 %, according to a recent <keyword id="20055667" type="General" weightage="20" keywordseo="PwC" source="keywords" meta.keywordsubtype="org" meta.entityname="PwC" meta.hostid="83" meta.entityid="PwC">PwC</keyword> report. Indian households are estimated to possess approximately 25,000 tonnes of gold, valued at around Rs 126 lakh crore. Despite this vast wealth, the existing gold loan market through organized channels is valued at just Rs 7.1 lakh crore. With the market penetration of gold loans in India currently at only 5.6%, there is considerable untapped potential within <keyword id="22902023" type="General" weightage="20" keywordseo="household-gold-holdings" source="keywords">household gold holdings</keyword>. Although not all gold is available for pledging--due to factors such as religious significance, emotional value, or lack of financial need--there remains substantial opportunity for growth in the gold loan sector. The gold loan market in India has historically been dominated by the unorganized sector. However, in recent years, organised players, particularly NBFCs, have begun to gain market share. Banks, too, have been making inroads, especially through retail gold loans and a continued focus on agricultural gold loans. This shift is expected to continue as organised players leverage their formal lending structures, transparency, and customer trust to capture a larger share of the market. Shaji Varghese, CEO, Muthoot FinCorp Limited, "Gold loan assets have been growing steadily and the potential to grow further is high since a major part of the country's gold loan market is still in the unorganized sector. <keyword id="19910265" type="General" weightage="20" keywordseo="gold-prices" source="keywords">Gold prices</keyword> have been rising over the years. There is also a paradigm shift on how buying gold is perceived today. Traditionally gold was purchased for historical, cultural and societal reasons and while that continues, people have started buying gold as an investment and also as a convenient option to raise funds for financial requirements." India remains one of the world's largest consumers of gold, with total demand reaching 747 tonnes in 2023. However, this represented a 3% decrease compared to the previous year, primarily due to the surge in gold prices, which dampened demand for gold jewellery. The price of gold in India increased from Rs 55,375 to Rs 66,532 per 10 grams (22 carats) between November 2023 and May 2024, prompting a shift towards lightweight or lower-carat jewellery items. Globally, the demand for gold grew by 3 % in 2023, with China emerging as the largest market. The global market's expansion presents opportunities for Indian gold loan financiers to explore new avenues for growth beyond domestic borders. Gold's relationship with the US dollar is a key factor influencing gold prices in India. A weakening rupee often leads to an increase in gold prices, as gold is priced in USD internationally. This dynamic drives higher imports and increases the cost of gold in rupees, further fuelling demand as investors seek a safe haven against currency fluctuations. V.P. Nandakumar, Managing Director and Chief Executive Officer, Manappuram Finance Ltd, "Of late, the sharp increase in gold prices has imparted some stability to the gold loan book of most players and we do not expect gold prices to come down due to geo-political factors, the accumulation of gold by central banks as well as the lasting allure of the yellow metal." The securitisation of gold through various financial instruments offers new avenues for gold loan players to diversify their offerings. By using gold-based security as collateral, established players can introduce new loan products that leverage the intrinsic value of physical gold.

India's gold loan market set for rapid growth amid rising prices; unorganized sector holds 63% share, notes recent PwC report

<div class="image-container float_right" style="width:400px"><div class="image"></div><a href="http://pictures.reuters.com/C.aspx?VP3=SearchResult_VPage&amp;VBID=2C0BXZLCI6WEX&amp;SMLS=1&amp;RW=1479&amp;RH=810#/SearchResult_VPage&amp;VBID=2C0BXZLCI6WEX&amp;SMLS=1&amp;RW=1479&amp;RH=810&amp;PN=1">REUTERS/Ajay Verma</a></div><keyword id="3658" type="COUNTRY" weightage="60" keywordseo="India">India</keyword>'s current account deficit hit a record high of 6.7 percent of GDP in Q3, according to the latest release by the <a href="http://www.rbi.org.in/scripts/BS_PressReleaseDisplay.aspx?prid=28401">Reserve Bank of India.</a>
This is up from 5.4 percent of GDP the previous quarter.
While exports didn't register "any significant growth", imports were up 9.4 percent driven by imports of <keyword id="18712" type="ENTERTAINMENT" weightage="60" keywordseo="Gold">gold</keyword> and oil. 
The central bank didn't quantify the increase in gold imports but the government has for sometime blamed them for the rise in the nation's current account deficit.
Last year's budget saw the government <a href="http://www.businessinsider.com/india-doubles-gold-import-duty-2012-3">double gold import taxes</a> for the second time in a year, to curb demand. This caused India's <a href="http://www.businessinsider.com/gold-demand-falls-in-china-and-india-2012-5">gold demand to plummet</a> at the time.
India's former finance minister Pranab Mukherjee said last year that the country needs more "financial literacy" and people need to move their money into other assets. At the time, <a href="http://www.businessinsider.com/india-finance-minister-investing-gold-2012-6">he said:</a>
"Quantum of import of gold ... is a clear indication (that) large section of community...want investment in dead asset only with expectation that value would appreciate
"…My request to financial analysts and other experts and leaders in this field is to ensure than we can create confidence in market, spread financial literacy, and merit of investment could be widely spread."
In a report last month, Moody's warned that "external debt has been the major source of current account financing," and that the country's external debt was rising and is "now growing faster than GDP."
This chart from Moody's shows the rise in both gold and oil imports in India:
<div class="image-container click-to-enlarge" style="width:587px"><div class="image"><a title_source="Moody's" title_caption="" class="zoomin" href="http://static4.businessinsider.com/image/51544dd5eab8ea5e23000000-960/screen shot 2013-03-28 at 10.04.00 am.jpg"></a></div>Moody's</div>
 Some analysts argue that the <a href="http://www.cnbc.com/id/46900913">contribution of gold and oil imports</a> to current account deficit is overstated, but that they do weaken the rupee. Some economists expect the current account deficit to <a href="http://in.reuters.com/article/2013/03/28/india-economy-current-account-deficit-idINDEE92R06K20130328">narrow in coming quarters.</a>
Gold bugs should however watch how India, currently the world's largest gold market, responds to its current account deficit.

Gold Imports Send India's Current Account Deficit To A Record High

If you are looking to make some quick cash by selling your household <keyword id="18712" type="ENTERTAINMENT" weightage="100" keywordseo="Gold">gold</keyword>, it’s the right time to so; from April 1, the cash limit for <a href="http://www.businessinsider.in/World-Gold-Council-says-Indias-gold-sales-slid-amidst-risingglobal-demand/articleshow/52237355.cms">sale against gold</a> will be reduced from Rs 20,000 to Rs 10,000 per person a day. 
 
Also read: <a href="http://www.businessinsider.in/These-are-the-10-countries-hoarding-enormous-mountains-of-gold/articleshow/49762472.cms">These are the 10 countries hoarding enormous mountains of gold</a> 
 Exceeding this limit would attract a new scheme of things, posing problems for both <keyword id="4352878" type="UNKNOWN" weightage="20" keywordseo="buyers-and-sellers">buyers and sellers</keyword>. 
 
Also read: <a href="http://www.businessinsider.in/markets/Rate-hikes-might-actually-be-good-for-gold/articleshow/52364891.cms">Rate hikes might actually be good for gold</a> 
 "This will affect <keyword id="6355185" type="ORGANIZATION" weightage="20" keywordseo="rural-india">rural India</keyword> the most where people are not yet accustomed to <keyword id="3845661" type="UNKNOWN" weightage="20" keywordseo="bank-transfers">bank transfers</keyword> or <keyword id="6626738" type="UNKNOWN" weightage="20" keywordseo="online-transactions">online transactions</keyword>. In urban India, a buyer can transfer money to a seller's account and the latter can withdraw it," Saurabh Gadgil, national director, India Bullion &amp; Jewellers Association, told ET. 
 
Also read: <a href="http://www.businessinsider.in/Appetite-For-Jewellery-Boosts-India-Gold-Demand-WGC/articleshow/45131471.cms">Appetite For Jewellery Boosts India Gold Demand - WGC</a> 
 
Earlier, gold traders used to <a href="http://www.businessinsider.in/Gold-has-become-too-expensive-for-most-of-the-worlds-consumers/articleshow/55321716.cms">buy gold</a> and raise multiple invoices against the purchase when the value exceeded Rs 20,000. However, it will become difficult to raise multiple invoices under the new rules. 
 
(Image source: WhatsUpLife)

Selling your gold for cash could be tougher from next month onwards

India's <keyword id="22879519" type="General" weightage="20" keywordseo="organised-gold-loan-market" source="keywords">organised gold loan market</keyword> is projected to double in the next five years to Rs 14.19 lakh crore despite expected moderation in growth due to stricter regulations, according to a <keyword id="19938520" type="General" weightage="20" keywordseo="PwC-India" source="keywords" meta.keywordsubtype="org" meta.entityname="PwC India" meta.hostid="153" meta.entityid="PwC India">PwC India</keyword> report. In fiscal 2023-24, the organised <keyword id="21627536" type="General" weightage="100" keywordseo="gold-loan-market" source="keywords">gold loan market</keyword> demonstrated substantial growth, reaching a valuation of Rs 7.1 lakh crore, according to the report titled 'Striking gold: The rise of India's gold loan market' . "It is expected to reach around Rs 14.19 lakh crore by FY 2029 at a five-year CAGR of 14.85 %," it said. Indian families own massive quantities of gold, estimated at 25,000 tonne. Existing gold holdings with <keyword id="19895507" type="General" weightage="20" keywordseo="Indian-households" source="keywords">Indian households</keyword> are valued at roughly Rs 126 lakh crore, the report said. It further said the gold loan market is poised to see moderate growth over the next two years, as gold lenders are facing increased scrutiny from regulatory authorities regarding loan-to-value (LTV) maintenance and auction-related procedures. "The second-largest player in the gold loan market being inactive would have an impact on market growth in FY25," the report said. Also, the <keyword id="19899808" type="General" weightage="20" keywordseo="rbi" source="keywords">RBI</keyword>'s advisory to <keyword id="19938300" type="General" weightage="20" keywordseo="NBFCs" source="keywords">NBFCs</keyword> on cash disbursement, which limits the amount of cash disbursal to Rs 20,000, could push customers to rely on the unorganised sector. The regulator has also raised concerns about the evaluation process for lending activities through fintech startups. The increased regulatory scrutiny and revised guidelines have led to a dip in the share prices of leading NBFCs, PwC said. "Gold loan lenders are expected to use this period to ensure that they are compliant with all regulatory guidelines while undertaking several measures to optimise their middle and back offices through digitisation initiatives," it said. Lenders are also expected to implement cost optimisation initiatives that will help drive up the bottom-line profitability of their companies and enhance investor confidence which has slightly depleted as a result of the regulatory scrutiny. Furthermore, the report said rising gold prices over the past financial year may also drive lenders to take a cautious approach to lending rates and pricing as any downward movement in gold prices will result in a substantial LTV breach that will further create operational issues for lenders in the form of auctions. "The growth of the gold loan market is expected to be steered by both banks and NBFCs," the report said. The emergence of digital gold loan aggregator platforms and their strategic collaboration with gold loan lenders such as banks and NBFCs will be a key driving factor for the growth of the industry, enabling gold loan lenders to tap into a previously untapped segment of digitally savvy customers. "While the forecasted growth of the gold loan market means potential growth for all players, the impact on the players may vary. Banks are expected to benefit from their lower interest rates," PwC said. Jaikrishnan G, Partner (Financial Services), PwC India said lending against gold is the oldest form of credit. It remains one of the most attractive options for consumer as well as lenders. "High return-on-assets, manageable risk, timely regulatory interventions, growing adoption, tech-enabled operating models have all contributed to sector growth. As India embraces the vision of Viksit Bharat, gold loans will provide much needed liquidity and credit access to growing small and medium entrepreneur segments," he said. The report further said growth by NBFCs is expected to be fuelled by their expansion and increased outreach to regions with low penetration, bringing new credit customers to the financial services ecosystem. Also, fintechs will play a critical role in bringing in the required technology and innovation into the industry, thus helping lenders to create unique product propositions to boost growth, it said. <keyword id="20037818" type="General" weightage="20" keywordseo="South-India" source="keywords">South India</keyword> contributes to a vast extent, as it emerges as the dominant market for gold loans, with 79.1% share of the total outstanding loans. The report also noted that an assumption can be made that the entire Rs 126 lakh crore worth of gold will not be available for pledging due to various reasons like jewelry belonging to religious institutions, jewellery with emotional value, and certain jewellery held by individuals who are not in need of finance.

Gold loan market projected to double in 5 years to Rs 14.19 lakh crore, says PwC India's report

OCD or obsessive compulsive disorder can be synonymous to India’s obsession with <keyword id="18712" type="ENTERTAINMENT" weightage="40" keywordseo="Gold">gold</keyword>. The yellow metal has always been the most sought-after investment avenue across the country. However, this obsession for gold has been negative for the country’s trade balance due to increase in imports bill. 
 
Gold &amp; CAD India’s trade deficit has been fuelled by high imports of gold and crude oil, contributing to the current account deficit (CAD), which has touched an all-time high of 4.8% of <keyword id="35050" type="CITY" weightage="40" keywordseo="gdp">GDP</keyword> or $88.2 billion, in 2012-13. During the first half of the current fiscal, gold and silver imports rose 8.7% to $23.1 billion. Oil imports during April-September also grew 3.58% to $82.87 billion. In contrast, non-oil imports declined 4.55% to $149.35 billion. In September this year, these dipped 24.19% to $21.24 billion. Therefore, gold import is mainly responsible for the rise in CAD and impacts the <keyword id="163339" type="UNKNOWN" weightage="40" keywordseo="foreign-exchange-reserves">foreign exchange reserves</keyword> of the country, as well as the value of <keyword id="6355302" type="ORGANIZATION" weightage="40" keywordseo="Rupee">rupee</keyword>. 
 
 
 
 
 
RBI stance on gold The Reserve Bank of India (RBI) and the <keyword id="44734" type="ORGANIZATION" weightage="40" keywordseo="Indian-Government">Indian government</keyword> battling a record high trade deficit, coupled with weak Rupee, are trying to curb gold imports, the most expensive non-essential item in its imports bill. The more Indians buy gold and buy it with dollars, the money moves out of the country, pushing the Rupee downwards. 
 
The RBI introduced the 80:20 scheme in July, under which 20% of the gold purchased from overseas had to be exported to avail further import of the metal. The restriction was aimed at curbing the widening current account deficit. Moreover, in a bid to fight the rising gold imports, the government has been raising the import duty on gold over the past few months – from 1% in January 2012 to the current 10%. In September this year, it also increased the import duty on gold jewellery to 15% from the previous 10%, in an effort to protect the local gem and jewellery manufacturers and exporters from gold jewellery imports. 
 According to government data released in October this year, gold imports during July-September 2013 was pegged at 63.13 tonne, valued at $2.69 billion, which was down 28% in volume and 77% in value over the corresponding 2nd quarter of the previous fiscal. This prompted a statement from the <keyword id="47209" type="ORGANIZATION" weightage="40" keywordseo="Finance-Ministry">Finance Ministry</keyword> who reiterated that this would enable the CAD to be limited to $70 billion as per the target. India’s gold imports in August dipped to $0.65 billion from $2.9 billion in July and a record $8.4 billion in May. 
 
Price trends in metros &amp; non-metros During April-June 2013, NHB Residex shows fall in real prices (inflation-adjusted), mostly in metros like Chennai, Hyderabad, <keyword id="6354925" type="COMPANY" weightage="40" keywordseo="Kolkata">Kolkata</keyword> and Bangalore, whereas marginal increase was seen in Delhi and Mumbai. 
 
India’s foreign trade and future outlook 
India’s trade deficit improved substantially in September 2013, raising hopes that the FY14 CAD will be much lower than the government’s estimate ($70 billion). At $6.8 billion, the September trade deficit touched the lowest level in 30 months. Exports during September, 2013 were valued at $27,679.33 million (₹1,76,461.53 crore), which was 11.15 % higher in dollar terms. Imports during the same period were valued at $34,439.50 million (₹ 2,19,559.04 crore) – representing a negative growth of 18.10 % in dollar terms and a negative growth of 4.38 % in rupee terms. 
 
Imports have been on a downward trajectory of late, with the sharpest fall seen in September 2013. 
 
The government’s and the RBI’s efforts in curbing gold imports helped to lower the demand for gold after the April-May spurt. Gold imports for August and September stood at $1.5 billion, the lowest in 52 months. 
 
Lower industrial growth has also led to muted demand for non-oil, non-gold imports. For April-August period this year, machinery and project goods imports were down 12% and 38% YoY, respectively. Industrial growth recovery during the 2nd half of FY14 is likely to revive non-oil, non-gold imports, potentially reviving overall imports. Having said that, overall trade deficit in FY14 will still be lower than FY13 as export growth will remain favourable and imports will be well contained. 
 Financial inclusion through financial literacy with help from banks and other financial intermediaries is also required as most Indians refrain from participating in the <keyword id="6357264" type="ORGANIZATION" weightage="40" keywordseo="capital-market">capital market</keyword> due to lack of knowledge. Financial literacy is crucial in creating awareness about the way capital market functions and also about the fact that the <keyword id="44794" type="UNKNOWN" weightage="40" keywordseo="Equity-market">equity market</keyword> provides relatively higher returns, coupled with higher risks, as compared to other <keyword id="6362476" type="ORGANIZATION" weightage="40" keywordseo="investments">investments</keyword> like gold or real estate. 
 
 
The author of this article is the Director of WealthRays Securities.

Gold Mania Virtually Over In India?

New Delhi, Jan 14 () Jewellers can sell only hallmarked jewellery and artefacts made of 14, 18 and 22 carat gold from January 15, 2021 and violation of this will attract penalty and imprisonment of one year, Consumer Affairs Minister Ram Vilas Paswan said on Tuesday.
Jewellers have been given one year time to register with the Bureau of Indian Standards (BIS) and implement the mandatory hallmarking of gold jewellery to ensure purity of the precious metal, he told reporters.
Consumers have to watch out for four marks on hallmarked gold jewellery: BIS mark, purity in carat, assay centre's name and jewellers' identification mark.
A notification to make mandatory hallmarking of gold jewellery from January 15, 2021 will be issued on January 16 by the Consumer Affairs Ministry.
Gold hallmarking is a purity certification of the precious metal and is voluntary in nature at present. The BIS is already running a hallmarking scheme for gold jewellery since April 2000 and around 40 per cent of gold jewellery is being hallmarked currently.
"This will become mandatory from January 15, 2021. We will give one year time for implementation. Jewellers will be allowed to sell only 14, 18 and 22 carat gold jewellery," Paswan said.
Instead of ten grades earlier, hallmarked gold jewellery will now be available in three grades of 14 carat, 18 carat and 22 carat, he said.
At present, there are 892 assaying and hallmarking centres in 234 district locations, and 28,849 jewellers have taken BIS registration.
"We are targeting to open hallmarking centres in all districts of the country and register all jewellers during this one year window," he said, adding that a massive awareness campaign will be launched.
The minister also said that mandatory hallmarking will protect the public against lower caratage and ensure consumers do not get cheated while buying gold ornaments and get the purity as marked on the ornaments.
A senior BIS official H S Pasriche said penal action will be taken against jewellers for violation of mandatory hallmarking norm. The penalty would be Rs 1 lakh to five times of the value of the commodity and also one year imprisonment.
The government has not received comments on the draft quality control order for mandatory hallmarking of gold jewellery and artefacts that was hosted on WTO website on October 10, 2019.
As per global trade rules of WTO, a member country has to notify a quality control order with the Geneva-based multilateral body and the process takes about two months time. Exporting nations have to comply with the BIS quality norms specified for gold in the quality control order. India is a part of the 164-member WTO since 1995.
India is the largest importer of gold, which mainly caters to the demand of jewellery industry. In volume terms, the country imports 700-800 tonne of gold annually.
According to World Gold Council data, India's cumulative gold demand declined to 496.11 tonne during the first nine months of 2019 from 523.9 tonne in the year-ago period. In 2018, gold demand stood at 760.4 tonne.
Similarly, the cumulative gold import declined to 502.9 tonnes in the first nine months of 2019 from 587.3 tonnes in the corresponding period of the previous year. India's gold imports stood at 755.7 tonnes in 2018. LUX BAL

You Searched For "India gold" and got 13 results

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Gold prices are falling and the world’s biggest market for the yellow metal is hoping for more shoppers

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Gold shines as demand for safe haven asset strong; Infomerics Ratings anticipates 10% price jump this year

ANI

India's gold loan market set for rapid growth amid rising prices; unorganized sector holds 63% share, notes recent PwC report

ANI

Gold Imports Send India's Current Account Deficit To A Record High

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Selling your gold for cash could be tougher from next month onwards

BI India Bureau

Gold loan market projected to double in 5 years to Rs 14.19 lakh crore, says PwC India's report

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Gold Mania Virtually Over In India?

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Jewellers to sell only 14, 18, 22 carat hallmarked gold jewellery from Jan 2021: Paswan

PTI

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