Every Dhanteras, millions of Indians buy gold, adding to the country’s already substantial stock of the precious metal. But while fresh purchases remain an important part of India’s gold demand, a significant quantity of gold already held by households and temple trusts remains unused.
Could recycling and monetising this existing gold help reduce India’s dependence on imports?
India is estimated to hold around 30,000 tonnes of gold with households and temple trusts, while annual consumption is around 700–800 tonnes, most of which is met through imports, according to Keyur Shah, CEO of Muthoot Exim, the precious metals vertical of the Muthoot Pappachan Group.
Bringing even a small portion of this idle gold back into circulation could help supplement domestic supply. However, the process involves more than simply selling old jewellery.
Consumers also have options such as gold leasing and monetisation, each with different terms and implications.
Why is recycling household gold important?
Recycling allows old jewellery, coins and other gold items to be processed and reintroduced into the supply chain. This can help meet part of the domestic demand without requiring an equivalent quantity of newly imported gold.
Shah said even recycling a small portion of India’s existing gold stock could make a difference to import dependence.
However, bringing this gold into circulation depends on whether households are comfortable with the process, particularly when it comes to purity testing and valuation.
How can households put idle gold to use?
There are different ways to unlock the value of gold that remains unused:
Selling old gold: Consumers can sell unwanted jewellery and coins to organised gold buyers. The final payment depends on the assessed purity, weight and applicable deductions.
Gold monetisation: The government’s Gold Monetisation Scheme is designed to allow eligible households and institutions to deposit gold with designated banks and earn interest under specified terms.
Gold leasing: Under this arrangement, customers make their gold available to a service provider under agreed terms instead of selling it outright.
Rhea Chaterji, Co-founder and COO of SafeGold, a digital platform that lets you buy, sell, and store gold, said earlier efforts to mobilise idle household gold faced challenges such as high minimum deposit thresholds, a lack of customer-friendly deposit options and limited liquidity.
She said SafeGold’s old gold leasing offering has helped unlock idle gold, including coins and broken jewellery, through digital and in-store channels.
According to Chaterji, more than 100,000 customers have opted for gold leasing through SafeGold’s digital and partner network, compared with approximately 7,000 retail users who have signed up for the Gold Monetisation Scheme.
Why has mobilising household gold been difficult?
Consumer confidence is a key factor, particularly when households are selling old jewellery.
Shah said consumers want assurance that their gold is tested accurately for purity and that they receive the right value. He highlighted the role of organised gold recycling centres in providing a more transparent process.
Muthoot Gold Point, which entered the gold recycling business nearly a decade ago, currently has around 126 touchpoints across India and plans to expand this network to 200 over the next 15–18 months, Shah said.
He also highlighted the need to take organised recycling services to Tier 2 and Tier 3 cities.
For gold leasing, Chaterji pointed to the need for a regulatory framework covering risk disclosures, minimum net worth requirements, independent audits and custodian and trustee structures.
Such safeguards, she said, could protect customers while allowing convenient deposit and withdrawal options.
What should consumers check before selling or leasing gold?
The choice depends on whether a household wants to sell its gold or retain an arrangement to earn returns from it.
Before proceeding, consumers should check how purity and weight are assessed, how the final value or returns are calculated, what charges and deductions apply, and the conditions governing withdrawal or redemption.
For leasing and monetisation, it is also important to understand the tenure, risks, contractual obligations and the credibility of the service provider.