India has about $5 trillion worth of gold in households and temples. Yet, it spends billions importing more each year. As pressure on the rupee and trade deficit increases, the government is considering reviving the Gold Monetisation Scheme. This plan would involve jewellers to unlock idle gold and turn household wealth into productive economic capital.

India’s love for gold is seen in two ways. For families, gold is a store of wealth and a hedge against uncertainty. For policymakers, it is a recurring economic problem. Despite having so much gold, India still imports a large amount each year, worsening the trade deficit. According to the Economic Times, gold imports rose 24% in FY26 to a record $71.9 billion, increasing the country’s external vulnerabilities.

The Gold Monetisation Scheme started in 2015. It aimed to encourage households to deposit idle gold with banks and earn returns. However, the scheme did not succeed. By late 2024, only about 31 tonnes of gold were mobilised. The government now wants to revise this scheme to make it more appealing, especially by involving jewellers who can help build consumer trust.

This would boost economic growth and ease pressure on the country’s external accounts.

Jewellers are vital to the new scheme. They are trusted by consumers for valuation and transactions. This trust could improve acceptance and accessibility of the monetisation program. The goal is to create a system where domestic gold meets domestic demand, reducing the need for imported bullion. The government’s renewed focus on this initiative responds to rising imports and aims to stabilize the economy amid geopolitical tensions affecting commodity prices.

Industry representatives suggest that if just 2% of household gold is turned into financial assets each year, it could add about $7.5 trillion to India’s GDP by 2047. This would boost economic growth and ease pressure on the country’s external accounts. The potential for this change is significant. The International Monetary Fund (IMF) has projected that India may reach a $5 trillion economy a year later than expected, highlighting the urgency of unlocking domestic resources.

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Career Ahead’s analysis shows that the renewed focus on gold monetisation is driven by rising gold imports and the need for economic resilience. As the government finalizes its approach, involving jewellers is seen as a key factor that could enhance the scheme’s success.

The potential revival of the Gold Monetisation Scheme opens up many investment opportunities, especially in the jewellery sector. Jewellers are expected to play a key role in the new scheme. This could give them access to a reliable and lower-cost source of raw material. As a result, they could reduce their dependence on imported bullion and improve inventory management.

As a result, they could reduce their dependence on imported bullion and improve inventory management.

As banks start to mobilise gold deposits through jewellers, perceptions of gold in the financial system may shift. Gold could change from being just a store of wealth to a productive asset that generates returns. This transformation could attract new investors to the gold market. The gold-backed lending market has already grown significantly. Companies have accumulated record holdings of pledged gold. As of FY26, major finance companies held more gold than the official reserves of several countries. This shows that households are willing to monetise their gold if the process is convenient and financially attractive.

In this context, the jewellery sector stands to gain greatly. If jewellers can integrate gold monetisation into their business models, they may see increased demand for their products and services. This could lead to higher profits and encourage more households to consider gold deposits as a way to generate income. Furthermore, the government’s initiative aligns with broader economic goals of enhancing financial inclusion and promoting sustainable growth, which are vital for long-term development.

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However, changing consumer perceptions about gold remains a challenge. For many Indian families, gold is not just an investment; it represents security, status, and emotional value. Any future scheme must address these cultural factors to gain widespread acceptance. As India moves forward with its plans to revive the Gold Monetisation Scheme, it will be crucial to monitor how effectively these reforms can mobilise domestic gold reserves and turn them into economic growth.

The next few months will be critical as the government finalises its approach to the Gold Monetisation Scheme. Observers will watch closely to see if including jewellers will enhance the scheme’s success and how it will impact the broader economy. The success of this initiative could set a precedent for similar efforts in other emerging markets facing similar challenges, potentially reshaping the global gold landscape.