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“Recycling of gold holds the key in curbing soaring gold imports into India,” says Keyur Shah, CEO, Precious Metals Business of the Muthoot Pappachan Group.
He foresees greater opportunities for organised players in gold recycling and low-cost standardised jewellery business, as he believes such a shift will lead to a larger regulated gold market in India.
“Recycling is the future of gold industry and it serves the very purpose of the gold monetisation scheme. It will curb surging gold imports and help reduce India’s rising current account deficit,” he told BusinessLine in an interaction.
Dormant treasure
It is estimated that 25,000 tonnes of gold is lying in private lockers, household savings and temple trusts. If 1 per cent (250 tonnes) comes out for recycling, it would have a reflection on the import bill and make the rupee stronger. The average gold consumption in India is around 800 tonnes per annum and mining is carried out for only 2-3 tonnes. The rest is being imported.
The gold business is largely unorganised, strengthening the case for introduction of a standard pricing mechanism throughout the country.
“Unfortunately, we have no role in day-to-day gold price fixing even though we are the world’s largest gold consumer. India should have control on the prices for which an organised market is the need of the hour,” Shah said.
The government has given clear indications about working toward a regulated gold business and the launch of India gold coins, sovereign gold bonds and the monetisation scheme are some of the efforts in this direction, he added.
The group is already in the business of gold recycling under the brand Muthoot Gold Point, with 11 outlets that have recycled approximately 600-700 kg till date.
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