India's Gold Consumption: Trends 2010-2024

Q: How have digital gold and ETFs changed traditional gold buying habits in India?

The emergence of digital gold and gold ETFs has changed the way many people in India approach gold investments. These modern options provide a level of convenience, liquidity, and cost savings that physical gold simply can't match. Unsurprisingly, they’ve gained significant traction, particularly among younger investors who value safety and the ease of storage. This shift has led to a noticeable decline in traditional gold purchases, such as jewelry or coins, for investment purposes. That said, ceremonial and cultural buying remains strong, but for purely investment goals, more individuals are opting for digital platforms and ETFs. This trend highlights a growing preference for straightforward, hassle-free financial tools.

India has consistently been one of the largest gold consumers worldwide, driven by its deep-rooted connection to gold for both personal and investment purposes. Between 2010 and 2024, gold demand in the country fluctuated due to economic conditions, government policies, and global events. Key highlights include:

Demand Trends: Annual gold consumption peaked at 1,006 metric tons in 2010 but dropped significantly during the pandemic to 446 metric tons in 2020, recovering to 785 metric tons in 2024.
Price Surge: Gold prices rose sharply, from ₹20,728 per 10 grams in 2010 to ₹78,245 in 2024, influencing buying patterns.
Government Policies: Import duties and trade regulations played a major role in shaping demand. A duty cut in July 2024 boosted purchases.
Investment Growth: Gold investment demand hit 239 metric tons in 2024, the highest since 2013, reflecting its value as a safe asset.
Supply Dependence: India relies on imports for over 98% of its gold, making global price changes and supply disruptions critical.

India's gold market reflects a mix of personal sentiment and financial strategy, with evolving trends like digital purchases and growing interest in alternatives like ETFs shaping its future.

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Gold Consumption in India from 2010 to 2024

India's gold consumption from 2010 to 2024 tells a story of resilience, shaped by market trends and government policies. Annual demand has ranged from a pandemic-induced low of 446 metric tons in 2020 to peaks surpassing 1,000 metric tons in the early 2010s.

Annual Gold Demand Data

The demand for gold has experienced distinct periods of growth and contraction. Starting strong with 1,006 metric tons in 2010, consumption slightly dipped to 969 metric tons in 2011, then further to 864 metric tons in 2012, before bouncing back to 974 metric tons in 2013.

The mid-2010s saw a significant decline, hitting 666 metric tons in 2016, one of the lowest points before the pandemic. Gradual recovery followed, with 771 metric tons in 2017 and 760 metric tons in 2018, though these figures remained below earlier highs.

The 2020 pandemic caused a steep drop to 446 metric tons, driven by lockdowns, economic uncertainty, and a slowdown in traditional gold-buying occasions like weddings and festivals. Post-pandemic recovery was evident, with demand climbing to 797 metric tons in 2021, stabilizing at 774 metric tons in 2022 and 747.5 metric tons in 2023, before increasing by 5% to 785 metric tons in 2024. Notably, gold investment demand in 2024 reached 239 metric tons, the highest since 2013, with a total value of around $18 billion, reflecting renewed confidence in gold as a safe investment.

These patterns highlight the interplay between market forces and government policies in shaping gold consumption trends.

Government Policy Effects

India's gold market has been significantly influenced by government policies, particularly those targeting import duties and trade regulations. These measures often aimed to address trade deficits but had notable side effects on consumption and market behavior.

For instance, higher import duties and restrictions limiting gold imports to specific agencies reduced both the availability and affordability of gold. Major duty hikes in 2013 and 2016 coincided with sharp drops in demand. However, these policies also led to unintended outcomes, such as an increase in smuggling and shifts in consumer behavior. Many buyers delayed purchases or turned to alternative channels, while others rushed to buy before duty hikes took effect.

A more recent example is the July 2024 duty cut, which spurred a surge in demand as buyers took advantage of lower prices. This pattern of policy-driven demand spikes has become a recurring feature of India's gold market.

Additionally, anti-money laundering regulations have impacted the market, though their effect has been less pronounced compared to import duties. These rules primarily influenced larger transactions and institutional purchases rather than everyday consumer buying.

Gold Supply Sources

India's reliance on imports has been a constant feature of its gold market. Over 98% of India's gold supply comes from imports, with domestic production contributing only a negligible amount. For example, in 2022, domestic mining output was just 1.2 metric tons, accounting for less than 0.2% of the annual demand, which exceeded 700 metric tons.

Gold imports play a massive role in the economy. In fiscal year 2022, imports were valued at over ₹3.4 trillion (approximately $41 billion), underscoring the scale of India's gold trade. This heavy dependence on imports makes the market highly sensitive to global price fluctuations, currency changes, and international supply disruptions.

Recycling provides a secondary source of gold but remains limited compared to imports. Consumers tend to sell gold for recycling when prices are high, but this supply is still a fraction of overall demand.

Because of this import-heavy supply structure, government policies on import duties and trade regulations have a disproportionate impact on the market. Unlike countries with significant domestic production, India's gold market reacts swiftly to changes in import-related policies. Global events, such as mining strikes or geopolitical tensions in major gold-producing regions, can also lead to supply constraints and price spikes in India.

For those navigating this complex market, access to accurate and timely data is essential. Tools like OilpriceAPI offer detailed gold price tracking, helping businesses and analysts understand how supply and policy shifts influence the market. These dynamics underscore India's role as a critical player in the global gold industry.

Main Factors Driving Gold Demand in India

India's gold demand is shaped by a mix of cultural traditions, investment habits, and sensitivity to price changes. These factors create distinct patterns of demand throughout the year.

Festivals and Wedding Traditions

Festivals like Diwali and wedding seasons are deeply tied to gold buying in India, symbolizing prosperity and good fortune. Even during tough economic times, families often prioritize purchasing gold during these occasions.

Diwali, a five-day festival celebrating the victory of good over evil, is the biggest driver of annual gold sales. During this time, people buy gold as an offering to Lakshmi, the goddess of wealth.

Weddings also play a massive role, accounting for about 50% of India’s annual gold consumption. The wedding season typically spans from October to December, aligning with Diwali and creating a surge in gold demand during the latter part of the year. For instance, in Q4 2021, gold jewelry purchases hit a record 265 metric tons, worth $15.3 billion. This represented an 82% increase from the previous year, fueled by the festive season and a rebound in celebrations after the subdued events of 2020.

Gold Investment Demand

Beyond cultural significance, gold is also a key investment for Indian households, making up about 16% of their total wealth. It’s seen as a safe-haven asset, especially during periods of stock market instability, inflation, or currency devaluation. In Q1 2025, investment demand rose by 7% to 46.7 metric tons, compared to 43.6 metric tons in the same period in 2024.

The introduction of Sovereign Gold Bonds by the government has shifted some demand away from physical gold, providing an alternative investment option.

"The elevated prices have impacted affordability. Yet, the enduring cultural significance of gold, especially ahead of Akshaya Tritiya and the upcoming wedding season, continues to support buying sentiment."

Sachin Jain, WGC India CEO

Investment-driven gold buying is more influenced by economic conditions and global trends than cultural purchases. This dual nature of demand ensures a steady level of consumption, even during uncertain times.

Price Effects on Consumer Buying

Gold prices also play a critical role in shaping demand. Different buyer groups respond differently to price changes. Since India relies heavily on gold imports, global price fluctuations and currency exchange rates directly affect the domestic market. When prices hit record highs, many consumers either opt for smaller, lightweight pieces or delay their purchases. For example, in Q1 2025, while overall gold demand dropped by 15% to 118.1 metric tons, the total value of purchases still grew by 22% due to higher prices.

Government policies, such as import duties, also impact consumer behavior by influencing final prices. While buyers purchasing for festivals or weddings are less price-sensitive, investment buyers often wait for favorable price conditions before making their moves.

Real-time gold pricing tools, like OilpriceAPI, help consumers and investors stay informed about market trends and make timely decisions.

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Gold Price Changes and Consumption Patterns

The way gold prices shift in India tells a story of market dynamics, consumer behavior, and investor strategies. These patterns, influenced by both global events and domestic policies, have shaped how Indians buy and view gold. Between 2010 and 2024, price fluctuations left a noticeable mark on purchasing trends and investment decisions. Let’s dive into how historical price changes, the pandemic, and global events influenced these patterns.

Price Movement History

From 2010 to 2024, the price of 24-karat gold per 10 grams skyrocketed from ₹20,728 to ₹78,245 - a staggering 277% jump. Initially, between 2010 and 2012, prices climbed steadily to ₹30,859 before undergoing a correction, dropping to ₹24,931 by 2015. However, by 2016, prices started climbing again, reaching ₹27,445 and eventually hitting ₹39,108 in 2019. The surge continued in 2020, with fluctuations in the rupee–US dollar exchange rate amplifying these changes due to India's reliance on gold imports. These price shifts influenced not just investments but also purchases tied to traditions and celebrations.

Price Swings and Consumer Response

The year 2020 was a turning point. During the pandemic, gold prices soared by 28%, rising from ₹39,108 to ₹50,151 per 10 grams, coinciding with gold surpassing US$2,000 per ounce for the first time. These high prices caused many buyers to delay purchases. However, when prices corrected slightly to ₹48,099 in 2021, demand rebounded as consumers saw an opportunity to buy.

Major Events Affecting Prices

Several global events played a role in shaping gold prices during this period. The COVID-19 pandemic drove investors to seek the safety of gold, pushing prices to record highs and creating one of the sharpest annual increases in India. Geopolitical tensions, such as the Russia-Ukraine conflict, further fueled risk aversion, keeping prices elevated. Between 2018 and 2020, trade wars and tariff disputes added another layer of uncertainty, impacting economic growth and investor confidence. Inflation also became a key factor, as the rupee’s declining purchasing power led households to turn to gold as a way to protect their wealth.

For those navigating these unpredictable price movements, staying informed is critical. Tools like OilpriceAPI offer real-time and historical gold price data, helping consumers and investors analyze trends and make well-informed decisions in today’s volatile market.

Government Policies and Market Changes

Expanding on earlier discussions about how policies shape demand, this section dives into the latest regulatory updates and their ripple effects on the gold market. Between 2010 and 2024, shifts in regulations and advancements in technology have significantly influenced India's gold imports and consumer buying habits.

Import Policies and Trade Balance

India's gold import regulations underwent a major overhaul in 2024. On July 24, 2024, as part of the Union Budget 2024-25, the government slashed import duties on gold from 15% to 6% and on gold doré from 14.35% to 5.35% - marking the steepest reduction since June 2013.

The market's response was immediate. Domestic gold prices dropped by 7%, and gold ETF net asset values fell between 6.5% and 8.9%. Retail jewelry stores saw a surge in foot traffic as consumers seized the opportunity to buy at lower prices. To counter smuggling, the government aimed to channel imports through legitimate routes. Additionally, imports of platinum alloy from the UAE - containing over 80% gold - have been linked to domestic gold prices trading at a discount.

These regulatory changes not only reshaped import patterns but also opened doors to new sales strategies.

New Trends in Gold Sales

The way people buy gold is evolving, with digital platforms now standing alongside traditional sales channels. Online gold purchases have risen, loans against gold are becoming more common, and Gold ETFs continue to see steady inflows. This growth has been supported by changes in tax policy introduced in the 2024 budget. The holding period for long-term capital gains on gold was reduced from 36 to 24 months, and the tax rate was lowered from 20% (with indexation) to 12.5% (without indexation).

According to an econometric model, these policy adjustments could drive an additional demand of 50 tons or more in the latter half of 2024. Kavita Chacko, Research Head at the World Gold Council, highlighted the potential impact:

The reduction in customs duty has the potential to measurably increase demand both during the upcoming buying season (between August and December) and over the longer term.

These shifting sales patterns are closely tied to broader supply chain dynamics, which are explored in the next section.

Supply Chain Comparison

India's gold supply chain operates through three main channels, each with its own strengths and weaknesses:

Supply Channel	Advantages	Limitations	Market Share Impact
Gold Imports	Fulfills large-scale demand; benefits from established trade networks and quality assurance	Vulnerable to duty changes and smuggling	Remains the dominant source for domestic consumption
Domestic Production	Reduces reliance on imports; offers lower transportation costs	Limited reserves, higher extraction costs, and strict regulations	Minimal contribution
Gold Recycling	Eco-friendly; utilizes existing gold stock and adapts to price changes	Relies on consumer participation and consistent processing standards	Growing, but still secondary

The 2024 policy changes have strengthened the import channel, making regulated trade more competitive compared to smuggling. While domestic production faces challenges due to limited reserves, recycling is gaining momentum as high gold prices encourage consumers to sell older jewelry. These supply chain shifts directly influence pricing and availability, reinforcing India's reliance on imports to meet its gold demand. This connection to global price trends and consumption behaviors is a recurring theme in the broader analysis.

Key Findings and Future Outlook

India's gold market has undergone notable changes from 2010 to 2024, influenced by shifting consumer preferences, policy developments, and broader economic conditions. In 2024, total gold demand hit 802.8 tons - the highest level since 2015.

Gold consumption remains regionally concentrated, with South India accounting for 40% of the country's total jewelry demand. Rural areas contribute between 55% and 58% of overall demand, while the Indian middle class drives approximately 50% of gold purchases.

A significant change in consumer behavior emerged in 2024, with investment demand jumping 29% to 239.4 tons - the highest since 2013. This surge coincided with record-breaking gold prices, which peaked at ₹85,800 ($985) per 10 grams in February 2025. Sachin Jain, WGC Regional CEO for India, shared his perspective on the market's future:

"Our outlook for 2025, gold demand is between 700-800 tonnes. It is expected that gold jewellery demand will recover due to wedding-related purchases, provided there is some level of price stability."

Consumer preferences are also evolving. Younger buyers increasingly favor lightweight, modern designs, while alternative metals like silver and platinum are gaining ground. Silver jewelry production rose from 700 tons in 2010 to 1,800 tons in 2021, and platinum demand grew from 0.8 tons to 3.9 tons over the same period.

On the investment side, Indian gold ETFs attracted net inflows of $242 million in June 2025, driving cumulative assets under management to $7.5 billion - a year-over-year increase of 88%. Meanwhile, the Reserve Bank of India hit a milestone with gold reserves reaching 880 tons in July 2025, representing 12.1% of the country's foreign exchange reserves.

Looking forward, the gold market in India is poised to remain dynamic. Real-time, reliable data - such as that offered by OilpriceAPI - will play a crucial role in helping stakeholders navigate this evolving landscape. The dual role of gold as both a cultural symbol and a modern investment asset suggests that both traditional jewelry and financial products will continue to grow, especially as prices stabilize and new investment tools gain traction.

FAQs

How have changes in government policies, like import duties, impacted India's gold consumption from 2010 to 2024?

Government policies have had a major impact on India's gold consumption patterns, especially through changes in import duties. For example, in the early 2010s, high import duties drove up gold prices, which led to a drop in both imports and demand. But in 2024, a sharp cut in duties from 15% to 6% made gold more affordable, reigniting interest and boosting consumption.

This clearly shows how adjustments in policies can shape market behavior, particularly in a price-sensitive market like India, where lower costs tend to drive higher demand.

How do weddings and festivals influence gold demand in India?

Gold holds a special place in Indian traditions, often seen as a symbol of prosperity and good fortune. This deep-rooted cultural significance makes weddings and festivals key drivers of gold demand in the country. Events like Diwali, Akshaya Tritiya, and the traditional wedding season are prime examples, as they bring a surge in gold purchases.

During these occasions, buying gold - whether as jewelry or coins - is more than just a transaction; it’s a cherished custom. Gifting and adorning gold are integral to celebrations, highlighting the strong bond between these festive moments and the enduring value of gold in Indian culture.

How have digital gold and ETFs changed traditional gold buying habits in India?

The emergence of digital gold and gold ETFs has changed the way many people in India approach gold investments. These modern options provide a level of convenience, liquidity, and cost savings that physical gold simply can't match. Unsurprisingly, they’ve gained significant traction, particularly among younger investors who value safety and the ease of storage.

This shift has led to a noticeable decline in traditional gold purchases, such as jewelry or coins, for investment purposes. That said, ceremonial and cultural buying remains strong, but for purely investment goals, more individuals are opting for digital platforms and ETFs. This trend highlights a growing preference for straightforward, hassle-free financial tools.