As Dhanteras and Diwali approach, Indians eagerly uphold a cherished tradition: buying gold. Dhanteras, the first day of the Diwali festival, is celebrated as a time to invite prosperity and good fortune.
Believed to bring lasting wealth and ward off negativity, gold purchases on Dhanteras are highly auspicious, with people investing in this precious metal as a symbol of protection.
The Indian gems and jewellery sector, a vital contributor to the economy, accounts for 7% of GDP and provides over 5 million jobs. This industry is set for impressive growth, projected to reach USD 103.06 billion by 2025, with a CAGR of 9.3%. Factors such as rising incomes, urbanisation, and evolving fashion trends are driving this demand, according to a report by Red Lab.
In Hinduism, gold is revered as a symbol of wealth, purity, and spiritual power, closely associated with Lakshmi, the goddess of prosperity. The metal features prominently in religious decoration, adorning statues and idols of deities like Vishnu. Devotees also offer gold at temples as an expression of devotion and a way to gain divine blessings.
Indians are redefining festival celebrations, merging tradition with modern trends, especially in the Experience Economy. This fusion is evident in the remarkable 137% rise in gold sales during the 2023 festive season, underscoring gold’s continuing significance during Diwali. This trend reflects a respect for India’s cultural heritage while adapting to contemporary influences.
The recent demand boost follows Finance Minister Nirmala Sitharaman’s announcement of a reduction in the total import duty on gold and silver from 15% to 6%.
Gold in India is more than just a precious metal—it embodies wealth, growth, prestige, elegance, and security, often treasured across generations.
Gold is also a practical asset, valued for its liquidity. It can be quickly converted into cash or used as collateral for instant loans in times of need.
A glimpse of gold’s journey:
- In 2000, a gram of gold cost about as much as a fancy dinner.
- By 2010, the price was equivalent to a high-end smartphone.
- By 2024, the same gram costs nearly as much as a premium laptop!
According to the World Gold Council India, Indian households held between 12,000 and 13,000 tonnes of gold in 2020–21. By 2023, this figure had grown to around 24,000–25,000 tonnes, or over 25 million kilograms.
This vast volume equals approximately 40% of India’s GDP. A report by the Oxford Gold Group states that Indian households possess around 25,000 tonnes (22,679,618 kg) of gold, accounting for about 11% of the global gold reserves. Indian households now collectively hold more gold than the reserves of the United States, Switzerland, Germany, and the International Monetary Fund combined.
Karnataka leads India in primary gold production, accounting for nearly all output. Rajasthan holds the second-largest gold reserves, with 125,913.72 tonnes, or 25% of India’s total reserves. Meanwhile, Kerala, with an annual consumption of 200-225 tonnes, boasts the highest per capita gold consumption in India.
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