India Must Channel $10Tn in Household Gold into Financial System: Former Minister Choudhary

India should unlock the vast household gold stockpiles by shifting consumers toward financial instruments, former Union Minister P P Choudhary and senior market officials said on Wednesday warning that physical hoarding limits the metal's contribution to economic growth.

Choudhary, a member of the Parliamentary Standing Commission on Finance, said greater financialisation of gold could reduce India's dependence on bullion imports and ease pressure on the current account deficit.

The gems and jewellery sector already contributes around 15% of merchandise exports and employs nearly 5 million people, he said addressing an Assocham event here.

India's households and temples together hold an estimated 50,000 tonnes of gold – valued at roughly $10 trillion – largely outside the formal financial system, said Sriram Krishnan, Chief Business Development Officer at the National Stock Exchange.

"We have the platform, we have the capability, we have the technology," Krishnan said, urging the government to remove barriers to dematerialising gold through Electronic Gold Receipts (EGR).

EGR is a SEBI-backed instrument that allows consumers to deposit physical gold and trade it on stock exchanges like shares.

A 3% GST levied when gold is surrendered under the EGR framework remains the key obstacle to wider adoption, he said, adding that NSE has submitted a white paper proposing a solution.

The push for financialisation comes as gold prices have surged roughly 30% in each of the past two fiscal years, said Jitin Makkar, Senior Vice President at ICRA Ltd.

Despite the price rally, jewellery demand has held firm, with major retailers posting double-digit revenue growth and expanding store counts by around 20% in both FY25 and FY26.

Gold loan exposure by banks and non-banking financial companies has meanwhile quadrupled from approximately ₹1 lakh crore to ₹4 lakh crore in recent years, Makkar added.

Regulatory steps including mandatory hallmarking and the introduction of Indian Good Delivery Standards have helped build trust in domestically produced bullion, he said, reducing reliance on imports to some extent.