Indian households, together the world\u2019s largest hoarders of gold, hold a record 23,000-24,000 tonnes of the prea record 23,000-24,000 tonnes of the precious metal, worth at least $800 billion, despite a sharp fall in international prices from their peaks in 2011, according to a comprehensive study of the Indian market by the London-headquartered World Gold Council (WGC). The value of the holdings is based on (conservative) international prices, which doesn\u2019t factor in a 10% customs duty. The value would be substantially higher in the rupee term. Coupled with 557.7 tonnes of the central bank\u2019s holdings, gold stocks at most of the known sources in the world\u2019s second-largest consumer would represent around a half of its gross domestic product. This means the gold monetisation scheme can be a success if the government makes it lucrative. The country\u2019s gold demand has been shaken a tad after demonetisation, as some customers feared a crackdown on gold holding as well, but long-term prospects remain bright with demand expected to average at 850-950 per annum by 2020, the WGC said. The country\u2019s gold demand is expected to have fallen to a seven-year low of 650-750 tonnes in 2016, although a recovery is expected as early as 2017. Talking to FE, WGC managing director (India) Somasundaram PR said demonetisation, however, should also expand the tax base and the positive impact on public finances could generate a more benign and supportive policy government approach towards gold. The note ban has led to the much-needed transparency across the gold value chain, he added. Currently, curbs on the sector include a 10% import duty on gold and the mandatory requirement of pan card for jewellery purchases above Rs 2 lakh. While the main driver of the Indian demand will continue to be jewellery, consumption of bars and coins is expected to be substantially higher at 250-300 tonnes by 2020, according to the WGC. Similarly, Indian jewellery exports could touch $40 billion mark by 2020, from the current $8.6 billion. He said the introduction of the GST, mandatory hallmarking and a massive push by organised jewellers to promote non-cash payments will make gold trade more transparent, the WGC said. Periodic surveys by private firms and independent researchers had, from time to time, pegged India\u2019s household reserves in the range of 18,000 to 24,000 tonnes, but the WGC, the miners\u2019 body whose estimates are widely tracked, has never put Indian household reserves at such a high level. Anecdotal evidence would point at a significantly higher volume as these estimates don\u2019t factor in unaccounted reserves held by religious institutions and trusts. The report, titled India\u2019s Gold Market \u2014 evolution and innovation, is based on data collected from various sources, with analysis done by the WGC. To curb gold imports to control a runaway current account deficit, the government effectively doubled the import duty on gold to 2% in January 2012 and has since raised it periodically. Currently the basic customs duty on gold stands at 10%. The commerce ministry has been seeking a cut in the duty level, arguing smuggling has gone up and that gold is a key raw material for jewellery manufacturing for the domestic market as well as exports involving millions of workers.