India Sees Surge in Gold Exchanges Amid Soaring Prices
Gold prices are soaring in India, prompting a surge in old gold exchanges. Consumers are trading in existing jewellery to buy new pieces. This trend is reshaping the jewellery market. Leading retailers report significant increases in exchange-led sales. This shift helps reduce the country's reliance on gold imports. Household gold is now entering the market.
India's jewellery retailers are seeing a sharp rise in old gold exchanges as soaring prices push consumers to recycle existing jewellery instead of buying with fresh cash, with some jewellers reporting a 60% year-on-year volume rise in such transactions.
Exchange-led purchases now account for almost half of sales at leading jewellery chains. The trend accelerated after the government raised effective import duty on gold to 15% from 6% last month, and prime minister Narendra Modi urged the public to reduce non-essential gold purchases to monitor rupee's fall, industry insiders said.
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Leading jewellers say the impact is already evident. Joy Alukkas, chairman of jewellery retail chain Joyalukkas, said gold exchange programmes now generate 65% of the company's sales, up from 40-45% before the prime minister's call to curb imports. "On some days, up to 70% of our business comes from old gold exchanges," he said. Alukkas expects the share of exchanges to rise further amid gold price surge and economic uncertainty.
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For Kalyan Jewellers, the share of exchange-led sales has risen to nearly 40-45% from 30%, "following our gold exchange campaigns after the PM's announcement," its executive director, Ramesh Kalyanaraman said. Old gold exchange is an easier way for consumers to use the value of jewellery they own to buy new pieces amid rising prices. Prices of 24-carat gold stood at ₹1,56,086 per 10 grams on Thursday, against ₹99,961 a year ago. For the economy, bringing household gold back into circulation can help reduce need for imports as India imports 900-1,000 tonnes of gold annually.
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Indian households hold an estimated 25,000 tonnes of gold, making the country one of the world's largest holders of the precious metal. "That reality is now beginning to reshape how organised jewellery retail approaches gold consumption strategies," said Surendra Mehta, national secretary of the India Bullion and Jewellers Association (IBJA).
He said gold exchanges are helping unlock household gold stocks, instead of relying solely on fresh imports. Tanishq has also been aggressively promoting exchanges. Arun Narayan, chief executive of Titan's jewellery division, said about 440,000 customers have exchanged 10 tonnes of gold over the past eight months.
