Investing in gold is a common practice in India, positioning the nation as the second-largest global consumer of this precious metal, only surpassed by neighboring China. Despite the substantial demand for gold in India, the local production remains relatively negligible.
The Disparity: Demand vs. Production
Annual gold consumption in India reaches a staggering 800 tonnes, while the domestic mines contribute a mere 1 tonne to the total gold output. This glaring gap results in the import of 799 tonnes of gold from international sources. Over the past six years, gold consumption has consistently risen, surging from 666 tonnes to 799 tonnes. Notably, even during the COVID-19 pandemic in 2020, gold consumption stood at 445 tonnes.
Despite a remarkable price increase from Rs 89 to Rs 59,000 since India’s independence, the demand for gold has exhibited unwavering persistence.
Global Gold Reserves: A Comparative Outlook
The United States leads the world in terms of gold reserves, boasting an impressive 8,133 tonnes stored in its treasury. In contrast, India maintains a gold reserve of 797 tonnes. However, according to the World Gold Council, Indians held a staggering 25,000 tonnes of gold in 2019, a quantity three times greater than the US government’s treasury holdings. The cumulative value of gold owned by Indian citizens exceeds Rs 1 lakh crore.
Jewelry accounts for a substantial portion, around 80 percent, of the total gold held by Indians. Additionally, the temples in India house a substantial amount of gold, totaling approximately 2,500 tonnes. Among these, the Padmanabhaswamy Temple located in Thiruvananthapuram, the capital of Kerala, houses an estimated 1300 tonnes of gold, dedicated to Maha Vishnu. Similarly, the Tirupati Temple in Andhra Pradesh, famous for the Lord Venkateshwara Temple, stands as a renowned pilgrimage site and possesses a remarkable 250 to 300 tonnes of gold. The temple receives monthly offerings of 100 kg of gold.
International Gold Sources
India primarily imports gold from Switzerland, the UAE, and South Africa, ensuring a consistent supply to meet the nation’s persistent demand.
Country | Import Source |
---|---|
Switzerland | Main Importer |
UAE | Secondary Importer |
South Africa | Supplier |