India’s growing focus on responsible gold consumption and reducing import dependency has received strong support from Malabar Gold & Diamonds, which has submitted a comprehensive proposal to strengthen the Gold Monetisation Scheme (GMS). The proposal highlights practical reforms aimed at mobilising idle domestic gold into the formal economy while encouraging recycling, reuse, and improved circulation of existing gold resources within India.
Quick Summary
- Malabar Gold & Diamonds submitted a proposal to strengthen the Gold Monetisation Scheme (GMS)
- The proposal supports Prime Minister Narendra Modi’s appeal on responsible gold consumption
- Recommendations include jeweller integration, lower deposit limits, flexible redemption, and GST waiver consideration
- India imports nearly 700–800 tonnes of gold annually despite large domestic holdings
- The company believes better gold recycling and monetisation can reduce import dependency
- Mobilising 1–2% of domestic gold reserves could release 600–700 tonnes into circulation
Proposal Submitted to Strengthen Gold Monetisation Scheme
The proposal, submitted by Mr. M.P. Ahammad, Chairman, Malabar Group, to Hon’ble Finance Minister Smt. Nirmala Sitharaman and Hon’ble Commerce & Industry Minister Shri Piyush Goyal, outlines practical measures aimed at increasing public participation in GMS, mobilising idle gold into the formal economy, and encouraging greater recycling, reuse, and circulation of existing gold within India.
India’s Gold Import Dependency and Domestic Holdings
India imports nearly 700–800 tonnes of gold annually, resulting in significant foreign exchange outflows and pressure on the current account deficit. At the same time, Indian households and institutions are estimated to hold nearly 25,000–35,000 tonnes of gold in the form of jewellery, coins and bars, much of which remains economically idle.
Focus on Recycling and Reuse of Existing Gold
Malabar Gold & Diamonds stated that greater focus on recycling, exchange, reuse, and monetisation of existing domestic gold can play an important role in reducing import dependency, limiting dollar outflow, and strengthening the Indian economy over the long term.
Statement from Mr. M.P. Ahammad
Commenting on the proposal, Mr. M.P. Ahammad, Chairman, Malabar Group, said: “India possesses one of the world’s largest privately held gold reserves while continuing to rely significantly on imports to meet domestic demand. We wholeheartedly support the Hon’ble Prime Minister’s appeal and believe that encouraging responsible utilisation, recycling, and circulation of existing gold within the country is an important national priority. With appropriate policy support and active integration of the organised jewellery sector, the Gold Monetisation Scheme can emerge as a highly effective mechanism for mobilising idle gold into the formal economy.”
Challenges in Existing Gold Monetisation Scheme
The proposal notes that while the Gold Monetisation Scheme was introduced to reduce import dependence and monetise idle domestic gold holdings, public participation remained limited due to longer lock-in periods, lower perceived returns, limited redemption flexibility, and procedural challenges.
Key Recommendations Proposed by Malabar Gold & Diamonds
To improve effectiveness and adoption of the scheme, Malabar Gold & Diamonds has recommended:
- Integration of organised jewellers into the GMS framework under regulatory oversight
- Reduction in minimum deposit quantity from 10 grams to 1 gram
- Flexible redemption options in either gold weight or cash
- Lower lock-in periods and improved liquidity options
- Simplified Aadhaar-based e-KYC procedures
- Customer incentives through jeweller participation, including loyalty-linked benefits
- Improved transparency in purity testing, valuation, and refining
- Consideration of GST waiver on gold brought back into the formal system
- Alignment of GMS with Gold Metal Loan (GML) frameworks for better utilisation within the industry
Jeweller-Assisted Collection Framework Recommendation
The proposal also recommends a jeweller-assisted collection and facilitation framework operating under bank and regulatory supervision, with digital tracking systems and transparent processing mechanisms to improve customer confidence and operational efficiency.
Potential Impact on India’s Gold Economy
According to the proposal, mobilisation of even 1–2% of India’s domestic gold holdings could potentially release nearly 600–700 tonnes of gold into circulation, equivalent to a substantial portion of the country’s annual gold import demand.
Vision for a More Self-Reliant Economy
Malabar Gold & Diamonds believes that encouraging recycling, reuse, exchange, and monetisation of existing gold within India can become a meaningful economic lever for the country. The company stated that a stronger and more accessible Gold Monetisation Scheme can help reduce import dependence, lower foreign exchange outflows, improve circulation of domestic gold resources, and contribute towards building a more resilient and self-reliant economy in line with the Hon’ble Prime Minister’s vision.
About Malabar Gold & Diamonds
Malabar Gold & Diamonds was established in 1993 and is the flagship company of Malabar Group, a leading diversified Indian business conglomerate.
With an annual turnover of $7.36 billion, the company currently ranks as the 5th largest jewellery retailer globally and operates over 445 showrooms across 14 countries, supported by offices, design centres, wholesale units, and manufacturing facilities across India, the Middle East, the Far East, the USA, the UK, Canada, Australia, and New Zealand. The group, owned by more than 3,500 shareholders, has over 30,000 professionals from more than 26 countries.
ESG and Social Responsibility Initiatives
ESG (Environmental, Social & Governance) remains a core commitment of the Group, with focus areas including health, housing, hunger eradication, education, environment, and women empowerment. The Group contributes five percent of its profits to social responsibility initiatives in the same country of operation.
FAQs
What is the Gold Monetisation Scheme (GMS)?
The Gold Monetisation Scheme is a Government of India initiative aimed at mobilising idle gold held by households and institutions into the formal economy.
Why has Malabar Gold & Diamonds submitted this proposal?
The company aims to strengthen the effectiveness of GMS by making it more customer-friendly and increasing public participation.
What reforms have been recommended?
Recommendations include jeweller integration into the GMS framework, lower minimum deposit quantities, flexible redemption options, simplified e-KYC, and improved liquidity.
How can stronger gold monetisation benefit India?
It can reduce gold import dependency, lower foreign exchange outflows, improve circulation of domestic gold resources, and strengthen economic resilience.
What is the estimated gold holding in India?
Indian households and institutions are estimated to hold around 25,000–35,000 tonnes of gold.
What impact could mobilisation of domestic gold have?
Mobilising even 1–2% of domestic gold holdings could release approximately 600–700 tonnes of gold into circulation.
Source: SVAR Media Network
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