India has emerged as the world’s second-largest consumer of gold, with total consumer demand rising to 802.8 tonnes in 2024, representing 26 per cent of global demand, according to an SBI Research report released on Wednesday.
The report said that India’s position comes just behind China, which recorded a slightly higher consumer demand of 815.4 tonnes.
The report, authored by Dr. Soumya Kanti Ghosh, Group Chief Economic Advisor, SBI, highlighted that domestic supply remains only a small fraction of India’s total gold consumption.
Imports continue to dominate, contributing around 86 per cent of the country’s total gold supply in 2024, as estimated by the World Gold Council. The report further stated that gold imports rose by 31 per cent in FY24 and 27 per cent in FY25, reflecting strong consumer appetite despite rising prices.
However, in 2025, higher gold prices have led to a noticeable decline in consumer demand. During the third quarter of 2025, consumer demand for gold dropped by nearly 16 per cent year-on-year, largely due to reduced demand for jewellery.
The report added that higher prices have also resulted in a 9 per cent fall in gold imports to $26.5 billion in the April-September period of FY26, compared to $29 billion during the same period in FY25.
Dr. Ghosh noted that central banks worldwide, including India’s, have been increasing their gold reserves as part of strategic reserve management.
The Reserve Bank of India’s gold reserves have now risen to 880 tonnes in 2025, reflecting a broader shift towards diversification and security in foreign exchange holdings.
The report also underlined that the return on gold has been comparable to the equity market over a five, ten, and fifteen-year period, but has significantly outperformed the market over one and three-year periods.
This, the report suggested, underscores gold’s continued appeal as a stable and profitable investment option amid global uncertainties.
An encouraging trend for India’s long-term gold strategy is the discovery of new gold deposits across several states. The Geological Survey of India (GSI) recently detected an estimated 1,685 kilograms of gold ore across Deogarh, Keonjhar, and Mayurbhanj districts in Odisha.
In addition, fresh findings have been reported in Jabalpur, Madhya Pradesh, where the quantity of gold ore could run into lakhs of tonnes. Andhra Pradesh’s Kurnool district is also home to India’s first large private gold mine, expected to produce around 750 kilograms of gold annually.
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These discoveries could potentially reduce India’s heavy reliance on imports and strengthen the country’s current account balance.
The government’s Sovereign Gold Bond (SGB) scheme, introduced in November 2015, has continued to attract investors, with 67 tranches issued up to February 2024. As of October 23, the outstanding SGBs amount to 125.3 tonnes.
The report observed that with a redemption price of Rs 12,704 announced for the 2017-18 Series IV, the total cost to the Government would stand at Rs 1.59 lakh crore.
“When the issue of these units is taken into account, it amounts to Rs 65,885 crore. Thus, it amounts to Rs 93,284 crore loss to the Government on account of the increase in gold price,” the report said.
The findings highlight the enduring importance of gold in India’s economy, both as an investment asset and as a cultural cornerstone, even as the government and the Reserve Bank of India work to balance import dependence with strategic resource development.
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