Prime Minister Narendra Modi’s appeal to citizens to postpone non-essential gold purchases in order to safeguard India’s foreign exchange reserves has triggered intense discussions across the bullion market, with jewellery retailers responding by aggressively promoting gold recycling and exchange programmes as a less disruptive alternative to suppressing demand.
The comments come at a time when India’s gold imports remain elevated amid volatile global commodity prices and persistent geopolitical uncertainty. India is among the world’s largest consumers of gold, and heavy imports often exert pressure on the current account deficit and the rupee.
Top jewellery retailers and industry executives said while they understand the macroeconomic concerns behind the government’s message, restricting consumer demand in a country where gold is culturally and financially embedded may not be practical.
Instead, organised jewellers are increasingly encouraging customers to recycle idle household gold, exchange old ornaments for new designs and monetise unused jewellery. “We are assessing the impact of the PM’s call on procurement. Having said that, there can be rotation of the gold that lies within lockers, temples or with citizens.
What do Industry execs say?
That is one way to reduce the import of gold. At the same time, consumers can take advantage of gold exchange schemes, which Titan and Tanishq (flagship jewellery brand) have been doing in a meaningful manner,” Ashok Sonthalia, CFO, Titan, said. Exchange-led purchases now account for more than half of total transactions at Tanishq, and the share continues to rise month-on-month, sector analysts said.
“While gold imports need to be controlled, jewellery buying is not directly connected to fresh gold imports alone, since a large part of the industry already functions through old gold exchange and recycled gold,” Suvankar Sen, CEO & MD, Senco Gold & Diamonds, said.
Kalyan Jewellers on Tuesday launched a campaign called ‘Nation First – Gold4India Initiative’ aimed at activating dormant household reserves and encouraging more responsible consumption patterns. “The initiative will strive to spark a behavioural shift in consumers, from viewing gold solely as a static asset preserved indefinitely, to recognising it as a renewable domestic resource,” T S Kalyanaraman, MD, Kalyan Jewellers, said.
Malabar Gold & Diamonds, meanwhile, has submitted a comprehensive proposal to the Government of India recommending strategic enhancements to the Gold Monetisation Scheme (GMS), chairman M.P. Ahammad said. Frontline jewellery stocks such as Titan, Senco and Kalyan Jewellers fell as much as 10-14% on the bourses over two days since the PM’s austerity call on Sunday.
“India possesses one of the world’s largest privately held gold reserves while continuing to rely significantly on imports to meet domestic demand. We support the Hon’ble Prime Minister’s appeal and believe that encouraging responsible utilisation, recycling, and circulation of existing gold within the country is an important national priority,” he said.
Several retailers across Mumbai, Delhi, Chennai and Hyderabad in recent months have launched promotional campaigns offering higher exchange values, lower making charges and instant purity assessments to customers opting for gold exchange schemes. Some chains are also investing in dedicated refining and recycling infrastructure to process old jewellery domestically.
Industry estimates suggest Indian households collectively hold more than 25,000 tonnes of gold, much of which remains outside the formal financial system. Executives believe even a modest increase in recycling volumes could substantially lower import requirements over time.
According to data from the World Gold Council, recycled gold has emerged as a growing component of India’s overall gold supply during periods of elevated prices. Analysts said record-high domestic gold prices are already prompting consumers to reconsider fresh purchases and instead remodel or exchange existing ornaments.
“Consumers are becoming more comfortable with redesigning inherited or old jewellery into contemporary products. This behavioural shift supports the recycling ecosystem,” Sen said.
The industry, however, remains cautious about the broader implications of discouraging gold buying. Trade bodies argue that jewellery demand supports millions of livelihoods across gold manufacturing, retail, refining and logistics. Any prolonged slowdown in consumer purchases could affect employment and small businesses during festive and wedding seasons.