India Plans Revamped Gold Scheme

The Indian government is preparing to launch a revamped Gold Monetization Scheme aimed at reducing the country's heavy dependence on gold imports and conserving foreign exchange reserves. India remains one of the world's largest consumers of gold, importing most of its demand due to limited domestic production.

The new initiative seeks to overcome the shortcomings of the 2015 Gold Monetization Scheme, which mobilized only about 38 tonnes of gold despite vast household holdings. Officials are targeting the mobilisation of up to 1,000 tonnes by making the scheme more accessible and attractive.

A major reform under consideration is allowing jewellery retailers to act as collection partners alongside banks. This is expected to increase public participation by enabling people to deposit gold through trusted local jewellers. Industry representatives have welcomed the proposal, saying it could improve convenience and confidence among consumers.

Economists believe that bringing even a small portion of India's estimated 25,000 tonnes of household gold into the formal financial system could unlock billions of dollars in liquidity, reduce import dependence, strengthen the rupee, and improve economic stability. The scheme's success, however, will depend on attractive returns, simplified procedures, and public trust.