After PM’s appeal, jewellery sales may see a 10-year decline:Retailers urge govt support, launch gold exchange schemes to entice customers

Buying gold jewellery has been a deep-rooted tradition in India for centuries, but recent government restrictions and soaring prices have changed how citizens shop. Experts estimate that gold jewellery sales may plunge to a 10-year low in the current financial year of FY27. To cope with this massive drop in demand, jewellery associations across the country have urged the government for assistance. At the same time, some jewellers have introduced special gold exchange schemes to tempt customers back into stores.
Why have gold sales seen a plunge? 1. PM Modi’s appeal: Prime Minister Narendra Modi appealed to people not to buy gold on 10 May. He said, “We must decide that, for one year, whatever function takes place at home, we will not buy gold jewellery.” 2. Skyrocketing price of gold: According to the India Bullion and Jewellers Association (IBJA), the price of 10 grams of 24-carat gold was quoted at ₹1.56 lakh. Meanwhile, the price of 1 kg of silver was quoted at ₹2.66 lakh. In last one year, the yellow metal prices have risen by up to 40%. While, the white metal has given a return of up to 188%.

What do jewellery associations want from the govt? Jewellery associations have urged the government to step in with policy changes to save the industry. The IBJA has backed the government’s move to curb gold demand and has proposed a monetisation scheme for nearly 1,000 tons of idle temple gold. According to the industry body, the proposal could ease pressure on imports and also help protect jobs of the small jewellers, artisans and labourers. Many trusts currently hold large quantities of idle gold — nearly 1,000 tons in total. If even a portion of that gold can be utilised, it would help significantly. -IBJA’s Gujarat State president Nainesh Pachchigar to PTI The Hidden Gold Wealth of India Even though current sales are low, India sits on an unimaginable mountain of gold accumulated over generations. 1. Gold Owned by Indian Households Indian families hold the largest private reserve of gold in the entire world. According to a report by the World Gold Council, Indian households own over 34,600 tonnes of gold. The value of this gold has crossed $5 trillion or ₹475 lakh crore. 2. Gold Kept with Indian Temples Devotees have been donating precious metals to deities for centuries. Experts estimate that various Indian temples collectively hold 8,000 tonnes of gold. How gold saved India’s economy in the 1990s This isn’t the first time gold has taken center stage in India’s financial landscape. Back in 1991, India faced a massive financial emergency. To save the country, the Reserve Bank of India (RBI) used gold as a collateral security and raised $600 million in cash. This emergency gold-backed loan stopped India from defaulting on its debts and bought the government enough time to launch historic economic reforms that completely modernized India’s economy. Jewellers roll out Gold Exchange Schemes Since customers are hesitant to buy brand-new gold with cash, shop owners are heavily promoted Gold Exchange Schemes off-late. Under these offers, customers can bring in their old, family-owned jewellery and exchange it for new designs. Jewellers hope that by recycling the massive amount of gold already sitting in Indian homes, they can keep their businesses running. E.g. a Pune-based jewellery chain, PNG Jewellers, has launched a gold exchange scheme, ‘Swarna Swaraj’ India’s gold should circulate within India. That is the simplest and most powerful thing we can do together. – PNG Jewellers, chairman and MD, Saurabh Gadgil
Other retailers also sense exchange schemes as new prefernce of customers: Rising prices could also increase exchange and upgrade purchases, as customers monetise existing gold holdings to manage budgets more efficiently. -Raghav Dhir, Director, Dhirsons Jewellers Dhiraj Dhir Group Kedia Advisory, founder, Ajay Kedia said, “Nearly 50% of India’s jewellery demand is now being supported through old gold exchange and recycling, indicating a gradual structural shift toward reuse.” Kedia added that the jewellery industry is increasingly focusing on lower-weight and lower-carat jewellery products to maintain affordability amid record-high bullion prices.