India is the second largest gold jewellery consumer in the world. In 2021, India bought 611 tonnes of gold jewellery, second only to China (673 tonnes), but comfortably ahead of all other gold-consuming markets, according to the 'Jewellery Demand and Trade' report released by the World Gold Council on January 19, 2023.
India is one of the world's largest consumers of gold. There are several reasons why India imports gold:
Cultural Significance: Gold has a significant cultural and traditional value in India. It is considered auspicious and is given as a gift for various occasions such as weddings and festivals.
Investment: Gold is considered a safe and stable investment option in India. Many people invest in gold as a hedge against inflation and currency fluctuations.
Jewelry: India has a large jewelry manufacturing industry, and gold is a key raw material used in the production of jewelry.
Shortage of domestic production: India has limited gold mines and domestic production is not sufficient to meet the demand, hence gold is imported.
Easy availability: Importing gold is easier and more cost-effective than mining it domestically.
Overall, the combination of cultural, investment and commercial reasons makes India one of the largest importers of gold in the world.
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