India’s gems and jewellery industry leaders have pushed for higher gold mining, enhanced transparency and ethical sourcing standards as well as lifting of restrictions on the export of 24-carat bullion for the country to have a greater say in the pricing of the yellow metal, as it continues a climb in prices.
With domestic mining expected to meet approximately 20 per cent of the country’s demand over the next decade, industry insiders said this may be a possibility in the near future.
Speaking at a gems and jewellery conference organised by the Chamber of Commerce of India (CCI), Sachin Jain, Regional CEO for India at the World Gold Council, said mining would be a critical component as the country moves towards Viksit Bharat 2047.
“Over the next decade about 20 per cent of the demand of gold will be furnished by our own gold mined in India. There will be a sense about Indian gold, employment, and foreign investment coming to the mining sector,” he said.
In the absence of a gold banking system, India is dependent on London’s AM and PM benchmark prices, despite Indians being amongst the largest consumers of gold.
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Sandeep Kohli, CEO of Novel Jewels, Aditya Birla Group, said Indian consumers hold 25,000 tonnes of gold compared to the government’s 800 tonnes – a ratio of 50:1.
In contrast, the Swiss government holds 1,000 tonnes while consumers hold 200 tonnes, he said, adding, “What I find absolutely astonishing is that consumer demand in India is not defining the price consumers pay, despite being amongst the largest consumers of gold.”
Describing gold as having deep cultural and emotional roots in India and it being owned by “100 per cent of all Indians in some way or the other”, Kohli pointed to lack of transparency as a major impediment in making its purchase.
While Jain believes that India would emerge as a global jewellery hub within the next two to three years, Samit Guha, Managing Director and CEO of MMTC PAMP India Pvt Ltd, emphasised the need for enhanced transparency and ethical sourcing standards to compete globally.
“If you were to be a global player which will allow you to set prices, you essentially have to get into areas of transparency about the entire marketing and sourcing process,” Guha said.
While praising the Bureau of Indian Standards’ hallmarking and HUID-based tracking system, he called for adoption of OECD and LBMA guidelines or establishment of equivalent Indian standards.
Guha also flagged regulatory barriers, noting that India is still not allowed to export 24-carat bullion, a restriction imposed by the RBI around 2012-13.
“There is a need to revisit it if we were really to supply Indian bullion in global exchanges. Otherwise, we will continue to be restricted with what we can do on the MCX and IIBX,” he added.
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