India’s Role in Gold Trade Globally

Let us see India’s role in Gold trade globally below in detailed

India plays a very important role in the global gold market even though it produces very little gold domestically. The country imports huge quantities of gold and then makes it into beautiful jewellery, which it sells at home and abroad. This combination of heavy imports and strong exports makes India a major player in the gold trade.

India – One of the Biggest Gold Buyers

India imports most of its gold because domestic gold production is very low. Indians buy gold for many reasons like weddings, festivals, and keeping savings safe. As a result, India is one of the world’s largest gold importers, accounting for over 9% of global gold imports.​

• India’s gold imports in 2024 were valued at around 45 billion U.S. dollars.
• Peak buying times are during festivals like Diwali and wedding seasons, which drive huge demand.
• The global gold market pay close attention to India’s demand trends since they can move world gold prices.

Cultural Love on Gold

Gold has a special place in Indian culture. It is seen as a symbol of wealth, status, and security. Even when gold prices rise sharply, Indians continue buying gold because they trust it more than other investments.

• Families buy gold for weddings, rituals, and gifts to bring good luck and prosperity.
• Many Indian households treat gold as an emergency fund they can sell or pledge in times of need.
• Gold demand remains strong despite fluctuations in other investment markets.

From Bullion to Jewellery Powerhouse

India does more than just import raw gold. Skilled artisans and large jewellery manufacturers transform bars of gold into finely crafted jewellery, which they sell domestically and export worldwide, generating millions of jobs.

• India is one of the largest exporters of gold jewellery to regions like the Middle East, the U.S., and Europe.
• The gold jewellery sector supports the livelihoods of millions, from artisans and small workshops to big brands.
• Value addition through jewellery manufacturing helps India earn foreign exchange beyond just selling raw gold.​

Impact on Trade Deficit and Rupee

India’s huge gold imports significantly affect the country’s trade deficit. When gold imports increase, the trade deficit widens, putting pressure on the Indian rupee and foreign exchange reserves.

• In October 2025, India’s trade deficit hit a record $41.7 billion, largely due to rising gold imports during festivals and wedding seasons.​
• A bigger trade deficit can weaken the rupee, making imports costlier and affecting inflation.
• The government keeps a close watch on gold inflows to manage currency and economic stability.

Key points

• Gold import volume in FY 2024-25 stood at approximately 757 tonnes, down (about 5%) from about 795 tonnes the previous year, but the value rose significantly due to price increases.
• The import value of $58 billion in FY 24-25 marked a 27% increase year-on-year.
• Gold jewellery exports were valued at approximately $9.33 billion in FY 24-25, showing robust demand for Indian craftsmanship globally.
• The biggest sources of India’s gold imports included Switzerland, UAE, and South Africa.
• India’s gold imports, while essential for domestic demand and jewellery manufacturing, also contribute heavily to the country’s trade deficit.

Major places In India famous for making Gold Jewellery and Ornaments

Jaipur (Rajasthan)

• Famous for traditional gold jewellery styles like Kundan, Polki, Jadau (old techniques where stones are embedded in gold).
• Known for beautiful bridal jewellery with bright stones and colourful enamel work.
• Johari Bazaar is a popular market for these special designs.

Surat (Gujarat)

• Called the diamond city because it cuts and polishes most of the world’s diamonds.
• It also makes a lot of diamond-studded gold jewellery for India and other countries.
• Many big jewellery factories and exporters are based here.

Mumbai (Maharashtra)

• India’s financial capital with huge markets for gold and diamond jewellery.
• Home to Bharat Diamond Bourse, the world’s largest diamond exchange.
• Zaveri Bazaar and other markets offer certified gold jewellery in different styles.

Hyderabad (Telangana)

• Called the “City of Pearls” because it makes pearl and gold jewellery.
• Famous for traditional South Indian gold jewellery and pearl bangles called lac bangles.
• Laad Bazaar near Charminar is a well-known jewellery market.

Chennai (Tamil Nadu)

• Known for temple jewellery used in dance and weddings, made of pure 22 karat gold.
• T. Nagar and Mylapore are popular shopping areas for heavy gold temple jewellery with designs of gods and goddesses.

Kolkata (West Bengal)

• Famous for lightweight gold jewellery easy to wear daily.
• Known for simple, classic Bengali gold jewellery designs.
• Bowbazar area has many traditional gold jewellers.

Thrissur (Kerala)

• Called the gold capital of Kerala, it makes a lot of gold jewellery every year.
• Known for wedding jewellery with unique Kerala designs like Kasu malas (coin necklaces) and Palakka bangles.
• Lots of wholesale shops and big jewellers are in this city.

Rajkot (Gujarat)

• Famous for machine-made lightweight gold jewellery that is affordable.
• The city produces daily-wear gold ornaments in large quantities for many buyers.

Government Efforts to Manage Gold Flows

The Indian government balances cultural traditions with economic needs by regulating gold imports and encouraging new financial products.

• Import duties vary to manage the volume of gold entering the country and prevent smuggling.
• Sovereign Gold Bonds (SGBs) allow people to invest in gold without buying physical metal, earning interest instead.
• Gold monetisation schemes encourage people to deposit idle gold with banks, reducing the need for new imports.​

Rise of Financial and Digital Gold

More people, especially urban youth, are investing in gold via digital platforms and financial products instead of buying physical jewellery or bars.

• Gold ETFs and digital gold platforms offer easy, paper-based gold investments linked to global prices.
• These methods lower transaction costs and improve safety compared to physical gold.
• Digital gold purchases in India rose 62% month-on-month in October 2025, showing growing investor interest.​

India’s Growing Influence in the Global Gold Chain

With improving policies, better regulation, and rising exports, India is becoming a stronger player in global gold trade beyond just importing.

• Quality controls and hallmarking increase trust in Indian jewellery worldwide.
• India’s gold refining and manufacturing capabilities are becoming more advanced and competitive.
• Managing imports, enhancing exports, and growing financial gold markets help India influence global gold prices and trade flows.