India expands gold monetization scheme to curb imports

The Indian government announced plans to broaden its Gold Monetisation Scheme (GMS), a program launched in 2015 to move idle household gold into the formal financial system. Under the scheme, individuals can deposit as little as 10 grams of gold with commercial banks, earning rupee interest and later receiving either the gold or its cash value. The original scheme, which has so far monetised only about 39 tonnes of gold, is being revised to include jewellers as collection and aggregation points, giving them handling fees and access to refined gold at lower cost.

Officials hope the expanded scheme will encourage Indians—who own an estimated 30,000 tonnes of gold, with 87 % of households possessing some—to surrender a portion of their holdings, thereby reducing the country's reliance on gold imports and narrowing the trade deficit. Past attempts, such as mandatory PAN disclosure for purchases over 200,000 rupees, pushed many dealers into the informal market, highlighting the challenge of shifting entrenched hoarding behaviour.