New Delhi: India’s total consumer demand for gold rose to 802.8 tonnes in 2024, accounting for 26 per cent of global gold demand, placing the country second only to China, which recorded 815.4 tonnes, according to an SBI Research report released on Wednesday.

The report, authored by Dr Soumya Kanti Ghosh, Group Chief Economic Adviser at SBI, highlighted that India’s domestic gold supply remains limited, with imports making up around 86 per cent of the total supply in 2024, as per World Gold Council estimates. Gold imports grew 31 per cent in FY24 and 27 per cent in FY25.

However, rising prices have weighed on consumption this year. In Q3 2025, consumer demand declined by around 16 per cent year-on-year, largely due to weaker jewellery sales.

Reflecting the slowdown, gold imports fell 9 per cent to $26.5 billion between April and September FY26, compared with $29 billion during the same period in FY25.

“Another interesting trend visible is the increase in gold reserves by the central banks. The RBI gold reserves rose to 880 tonnes in 2025 as part of strategic reserve management,” Dr Ghosh noted.

Over the long term, returns on gold have been comparable to equity markets (Sensex) across five-, ten- and fifteen-year periods. However, gold has outperformed equities over the past one and three years, the report stated.

It also pointed to recent gold discoveries that could reduce India’s import dependence. These include finds by the Geological Survey of India (GSI) in Odisha’s Deogarh, Keonjhar and Mayurbhanj districts (with an estimated 1,685 kg of gold ore), Jabalpur in Madhya Pradesh (with potentially massive reserves), and Kurnool in Andhra Pradesh, where India’s first major private gold mine is expected to produce 750 kg of gold annually.

The government’s Sovereign Gold Bond (SGB) scheme, launched in November 2015, has seen 67 tranches issued, the latest in February 2024. As of October 23, outstanding SGBs stood at 125.3 tonnes.

With a redemption price of ₹12,704 announced for the 2017–18 Series IV, the total cost to the government is estimated at ₹1.59 lakh crore, against an issue value of ₹65,885 crore, implying a ₹93,284 crore loss due to the rise in gold prices, the report added.

IANS