According to Gaurav Mathur, Founder and CEO of SafeGold, a product of Digital Gold India, the model enables consumers to “put their gold holdings to productive use rather than leaving them idle.”
In return, consumers earn an additional return in gold while continuing to own the principal quantity.
Renisha Chainani, Head of Research at Augmont, India’s integrated gold platform, describes gold leasing as a way of converting idle gold into a yield-generating asset. Depending on the platform and tenure, investors can earn a return that is typically credited in the form of additional gold weight.
How does the model work?The process generally follows a few steps:
- Consumers purchase digital gold or deposit vaulted gold.
- A platform facilitates the leasing of this gold to verified jewellers.
- Jewellers use the metal as part of their working inventory.
- Consumers receive a lease return, usually in gold units.
- At the end of the lease period, the underlying quantity of gold remains with the owner.
The arrangement creates a link between households that own gold and jewellers that require it for business operations.
Why is gold leasing drawing attention?
The concept has gained interest because of India’s significant stock of privately held gold and its continued reliance on imports.
Mathur says mobilising domestic gold through leasing could help bring existing gold holdings back into circulation, thereby reducing the need for fresh imports over time.
Chainani notes that if even a small portion of India’s privately held gold is mobilised annually, it could substitute a meaningful amount of imported gold and potentially ease pressure on the country’s current account deficit.
Can it reduce India’s dependence on gold imports?
Industry participants believe gold leasing can contribute to reducing import dependence, although they caution that the process is likely to be gradual.
Kaushlendra Sinha, CEO of the India Association for Gold Excellence and Standards (IAGES), a Self Regulatory Organisation (SRO) created by the Indian gold industry, says Indians have a strong emotional and cultural attachment to gold jewellery, making monetisation a long-term process.
However, he notes that every gram of gold mobilised domestically reduces the need for imports.
Experts say a structured and regulated framework could encourage wider participation by building trust, ensuring transparency and creating a more circular gold economy.
What does it mean for jewellers?
Wider adoption of gold leasing could have implications for jewellers across sourcing, inventory management and financing.
Alternative source of supply
Leasing provides jewellers with access to domestically mobilised gold, reducing dependence on imported bullion.
Lower financing costs
Jewellers often rely on bank borrowings or gold metal loans to finance inventory purchases.
According to Chainani, leasing arrangements can provide access to gold at lower effective costs than traditional financing routes, potentially improving margins.
Improved inventory management
Mathur says leasing can allow jewellers to access gold inventory without committing large amounts of capital to outright purchases.
Gold-denominated leases can also help manage inventory price risk, as jewellers return the metal at the end of the lease period.
Greater access for smaller players
Industry participants say leasing can improve access to gold inventory for smaller and mid-sized jewellers that may have limited access to traditional financing channels.
What are the challenges?
Despite its potential, several hurdles remain before gold leasing can scale meaningfully.
These include:
- Building consumer trust in the leasing mechanism;
- Overcoming the emotional attachment associated with physical gold holdings;
- Expanding assaying, storage and operational infrastructure; and
- Establishing a clear regulatory and compliance framework.
Sinha says jewellers remain a critical link in the process, making standardisation, documentation and consumer confidence essential for wider adoption.
Who offers gold leasing in India currently?
Retail gold leasing is currently available through a limited number of digital gold platforms.
Companies such as SafeGold and myGold offer programmes that allow users to lease their gold holdings to jewellers and earn additional returns in gold.
Fintech platform Gullak has also offered gold leasing products through its digital gold platform.
Industry participants note that retail gold leasing remains an emerging segment and does not yet have a dedicated regulatory framework comparable to some other financial products. They say greater standardisation and regulatory clarity could help build consumer confidence and support wider adoption over time.
What happens if there is a default?
In case of a default, the underlying structure of gold leasing means investors depend on platform-level safeguards rather than insurance protection.
Experts note that the physical gold is deployed into the leasing system and may not return in the same form or custody chain during the tenure, as it is typically used as inventory by jewellers.
Mathur says protection is based on market-linked collateral rather than insurance.
“We generally have market-linked collateral — it ranges from bank guarantees for smaller companies, to post-dated cheques from publicly listed or large retail footprint companies,” he adds.
He also clarifies that bank insurance does not extend to such arrangements.
“Banks won’t insure anyone’s gold… in this case, the customer would be giving physical possession of the gold, and the bank would not have anything to do with it.”
