India’s gold craze costs government Rs 93,000 crore
India ranked second globally for gold consumption during 2024, with demand reaching 802.8 tonnes, representing 26 percent of worldwide purchases and trailing only China at 815.4 tonnes, an SBI Research report said on Wednesday. The country relies heavily on imports to meet this appetite, with overseas purchases accounting for roughly 86 percent of total supply and rising 31 percent in fiscal 2024 and 27 percent in fiscal 2025.
Rising prices have dampened enthusiasm this year, with third-quarter 2025 consumer demand dropping 16 percent from a year earlier due to reduced jewelry purchases, according to the analysis by Dr. Soumya Kanti Ghosh, Group Chief Economic Advisor at SBI. Imports fell 9 percent to $26.5 billion during April through September of fiscal 2026 compared with $29 billion in the same stretch a year prior. The Reserve Bank of India increased its gold holdings to 880 tonnes in 2025 as part of strategic reserve planning.
Recent discoveries of deposits in Odisha, Madhya Pradesh and Andhra Pradesh could reduce import dependence and benefit the current account balance, the report noted. The government faces potential losses of Rs 93,284 crore on Sovereign Gold Bonds issued between November 2015 and February 2024, with outstanding holdings of 125.3 tonnes valued far above original issuance costs.
