Kolkata: Gold imports in India have come under attention after Prime Minister Narendra Modi urged the people not to buy gold for a year. The PM’s appeal
has been in view of the continuing conflict in West Asia between the US and Iran which has increased the strain on the Indian currency. Modi’s indication is clear — goldis the second most expensive item on the country’s import bill. As Indians keep on buying gold despite the rise in prices, the country needs to import more and more gold, which creates demand for more and more dollars, which, in turn, puts downward pressure on the value of the Indian rupee against the US dollar. Since Indians buy gold for different reasons — jewellery, bullion and for investment purposes — the demand for the yellow metal never really goes down significantly. A look at Indian’s gold consumption and imports give an idea the enormous strain it puts on the economy.
Gold import data in India
India is the world’s second-biggest gold consumer after China. Gold import in India is largely driven by the jewellery industry. However, there is a rising demand from the investment community too, who tend to shift towards to the metal whenever geopolitical uncertainty or inflation rises. India’s gold imports rose by more than 24% to an all time high of $71.98 billion in FY26. The imports stood at $58 billion in FY25 and $45.54 billion in FY24. India imported gold worth $35 billion in FY23, $46.14 billion in FY22, $34.62 billion in FY21 and $28.2 billion in FY20. However, the volumes of gold imports declined 4.76% to touch 721.03 tonnes in FY26 from 757.09 tonnes in FY25. In FY24 it stood at 795.2 tonnes and in FY23 at 678.3 tonnes.
Investment peaks in Gold ETFs
There has been record investments in Gold ETFs in FY26. ETFs are dematerialised investments in gold which have attracted the attention of investors last year after the surge in gold prices. The problem in terms of gold imports is that when investment in Gold ETFsgoes up, it requires more metallic gold since ETFs are designed to track gold prices and authorised participants have to purchase gold to back the new ETF units created. Investment strategists now advise people to allocate 10-15% of their poprtfolio to gold.
EGRs and digital gold
The sale of digital gold is also rising. Digital gold is backed by 24K gold, which is stored in audited and insured vaults. In January 2025, Digital Gold investments stood at Rs 800 crore which rose to Rs 2,100 crore by the end of December. Only a few days ago, NSE has launched EGRs or Electronic Gold Receipts, which is another dematerialised investment in gold. All these create new demands for gold that adds to the pressure of imports.
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