With gold near record prices in India, more buyers are exchanging old jewellery for new pieces this festive season. Big jewellers now get half or more of their sales through exchanges, which reduces how much gold India must import.
At a glance
- Old and recycled gold made up over 40% of organised jewellers' revenue in April-June, Crisil says.
- India's gold imports fell to $2.3 billion in August, down 58% from a year earlier.
- Import duty rose to 15% from 6% in May 2026, lifting the landed cost of gold.
Background
India is the world's second-largest gold consumer after China and imports roughly 700 to 900 tonnes a year, which weighs on its trade deficit. Indian households hold an estimated 25,000 to 50,000 tonnes of gold. In an old-gold exchange, a jeweller values a customer's existing gold and credits it against a new purchase.
What is changing
Old-gold exchange has become a major source of jewellery sales, The Economic Times reported. At Joyalukkas, about 73% of sales in August came through exchanges, up from 57% a year earlier, chairman Joy Alukkas said. Titan's jewellery CEO Arun Narayan said over 50% of transactions in its stores now include an element of exchange.
At Kalyan Jewellers, recycled gold made up over 46% of revenue in April-June and over 55% in June. Senco said exchanges crossed 50% of its business in the July-September quarter.
Why buyers are trading in
High prices are the main reason. Domestic gold averaged ₹1,51,346 per 10 grams in September, within about 2% of May's record, even though international prices were 13.8% below their February peak. Crisil's Sehul Bhatt said the import duty rise to 15% from 6% in May lifted landed costs by about 8.5%, while rupee depreciation of around 8% added more.
Policy has played a part too. Prime Minister Narendra Modi urged Indians on May 10 to avoid buying gold for a year, and jewellers have since run campaigns to promote exchanges. Mangesh Chauhan of Sky Gold & Diamonds said buyers often keep the same budget and use their old gold to bridge the gap.
What it means for India
Recycled gold reduces the need for fresh imports. Imports fell to $2.3 billion in August, down 45% from July and 58% from a year earlier, and the World Gold Council said existing domestic supply appeared sufficient to meet expected demand.
Lower imports ease pressure on the trade deficit and the rupee. For jewellers, the trade-off is margin: Senco's Suvankar Sen cautioned that higher exchange volumes could squeeze profitability.
Our read
Outlook: neutral. Lower Indian imports reduce one source of physical demand, but central bank and investment flows mainly set the global price.
What to watch
- India's gold import figures for September and October.
- Festive season jewellery sales and the share coming from exchanges.
- Any change to the 15% gold import duty.
For information only, not investment advice.
Gold price in India
metalscost.com India reference price as of 2026-10-24.
Detailed analysis
Timeline
- 2026-05-10: PM Modi urges Indians to avoid buying gold for a year.
Demand Drivers
Buyers are recycling household gold instead of buying new metal as prices stay high.
Trade Tariffs
The import duty rise to 15% from 6% lifted landed costs by about 8.5%, Crisil says.
Currency Impact
Rupee depreciation of around 8% has kept domestic prices high despite lower global prices.
What could lift prices
- Festive and wedding demand for jewellery remains strong.
- Domestic prices remain close to record highs.
What could weigh on prices
- Exchanges reduce the need for fresh gold imports.
- A higher import duty discourages new purchases.
Country impact
| Country | Impact | Reason |
|---|---|---|
| India | High | Old-gold exchanges are cutting imports and easing the trade deficit. |
Industry impact
| Industry | Effect | Reason |
|---|---|---|
| Jewellery | Neutral | Exchanges keep sales going but can squeeze jewellers' margins. |
| Bullion Trading | Negative | Lower imports mean less demand for fresh imported bullion. |
Who gains, who loses
- India's trade balance: Lower gold imports reduce the import bill.
- Gold importers: They face lower demand for fresh bullion.
Other ways this could play out
- If prices fall sharply, buyers may return to buying fresh gold and imports could rise.
- If the duty stays at 15%, exchanges could remain a large share of sales.
Price risks
- A cut in import duty could revive imports quickly.
- Lower global prices could narrow the gap that drives exchanges.
Technical view
Price is trading below both its 20-period and 50-period moving averages, a bearish alignment.
Computed from metalscost.com's own stored price history.
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