According to a report by the World Gold Council (WGC), India has become the fourth largest recycler in the world, with 75 tonnes to be recycled by 2021.

According to the WGC report titled “Gold Refining and Recycling”, China will lead the global gold recycling list with 168 tonnes of gold recovered in 2021, Italy will be third with 80 tonnes, and the US with 78 tonnes three. India ranks fourth with 75 tonnes to be recycled by 2021.

According to the WGC report titled “Gold Refining and Recovery”, India’s gold refining capacity will increase from 300 tonnes in 2013 to 1,500 tonnes (500%) in 2021.

The report further noted that the gold refining landscape in the country has changed over the past decade, with the number of formal businesses increasing from less than five in 2013 to 33 in 2021. While the informal sector has increased by 300-500 tonnes, it is worth noting that there has been a decline in the scale of unorganised refining, mainly due to the tightening of pollution regulations by the government.

On the other hand, the growth of the gold refining industry in India has been supported by tax incentives such as the difference in import duties on refined gold bars, stimulating the growth of organised refining in India. As a result, gold’s share of total imports rose from 7% in 2013 to around 22% in 2021.

“India has the potential to become a competitive refining hub if the next phase of competitive market reform promotes responsible sourcing, bullion exports and continued supply of bullion or scrap. Domestic recycling, driven by local rupee prices and economic cycles, utilising market-linked WGC India CEO Somasundaram PR commented that this should be supported by improvements such as GMS (Gold Monetisation Scheme) as various policy measures are synchronised to mainstream excess gold and improve liquidity through bullion exchanges.

He said the holding period for jewellery will continue to decline as younger consumers look to change designs more frequently, a trend that could help improve recycling rates.

“On the other hand, higher incomes from strong economic growth will reduce direct sales and consumers will find it easier to hold gold than direct sales. Therefore, better incentives and technology-based solutions are needed to support this, Organised recycling includes the end-to-end gold supply chain,” he added.

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While India is the fourth-largest recycler in the world, it has very little recycling in its gold inventory, accounting for about 8% of the global scrap supply, the WGC report said. Recycling is driven by current gold price movements, future price expectations and the economic backdrop.