India’s surge in old-gold exchanges trims bullion imports and eases trade deficit
Indian shoppers are swapping old jewellery for new pieces, causing a sharp fall in gold imports and relieving trade-deficit pressure.
In August, India’s gold imports slumped dramatically, falling 45% from the prior month and 58% from a year earlier, indicating a pivot toward recycled gold supplies. Higher domestic prices and a rise in import duty to 15% have led consumers to exchange existing jewellery rather than buy fresh gold. Leading retailers such as Kalyan Jewellers and Senco Gold & Diamonds report that old-gold exchanges now represent over half of their sales, with Crisil noting the practice contributed more than 40% of organised jewellery revenue in Q1 FY27.
Prime Minister Narendra Modi’s recent call to avoid gold purchases appears to have reinforced this behavior. The surge in recycled bullion reduces reliance on imported bullion and helps narrow the trade deficit, though it compresses cash margins for sellers. Fresh bullion remains necessary to satisfy demand across product categories.
Why it matters
Lower gold imports ease India’s trade deficit and reduce strain on foreign-exchange reserves.
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