India Gold Imports Surge as Prices Hit New Highs
- Despite record prices in rupee terms, India's gold imports saw a resurgence in March, climbing after a two-month decline.
- last month, imports reached $4.4 billion, according to data from India's Ministry of Commerce.
- The rising gold price has led to "demand realignment," according to the World Gold Council, with buyers becoming more selective.Many consumers are holding back, with jewelry demand limited...
India Gold Imports Surge Despite Record High Prices
Despite record prices in rupee terms, India’s gold imports saw a resurgence in March, climbing after a two-month decline. india ranks as the world’s second-largest gold market.The World Gold Council noted the sharp increase suggests renewed demand for gold, even at elevated prices.
last month, imports reached $4.4 billion, according to data from India’s Ministry of Commerce. This figure nearly doubles the previous month’s total and significantly exceeds the $1.53 billion recorded in March 2024. This equates to an estimated 47 to 52 tons of gold flowing into India.
The rising gold price has led to “demand realignment,” according to the World Gold Council, with buyers becoming more selective.Many consumers are holding back, with jewelry demand limited to essential purchases, particularly for weddings. A noticeable shift has occurred, with more buyers trading in old jewelry for new pieces. Some reports suggest that 40–45 percent of purchases now involve some form of exchange.
Conversely, gold’s investment appeal is growing, with robust demand for gold bars and coins despite high prices. Amid broader financial market uncertainty, gold’s role as a store of value is becoming more pronounced, reflecting a shift from consumption to wealth preservation.
India-based ETFs experienced modest outflows for the first time in 10 months as investors engaged in profit-taking and portfolio rebalancing. Though, assets managed by Indian gold-backed funds still reached a record high. Data indicates a surge in ETF investing, with 130,000 new investor accounts added in March, bringing the total to a record 7 million.
Indians have a strong cultural affinity for gold, interwoven with marriage ceremonies, religious practices, and cultural rituals. Festival seasons typically boost gold demand. Estimates suggest Indian households hold over 25,000 tons of gold. Gold jewelry serves as both adornment and a means of preserving wealth, especially in rural areas.
In India, gold jewelry is viewed as an investment, unlike in the West where it’s frequently enough seen as a luxury. Even lower-income households purchase gold. A 2018 survey revealed that 87 percent of Indian households own some gold, with over 75 percent of families in the bottom 10 percent of income owning some.
What’s next
The World Gold Council anticipates that festival and wedding purchases will continue to drive demand, supported by gold’s reputation as a safe-haven asset.