Kalyan & Malabar push gold recycling after Modi’s call to curb imports

India’s leading jewellery retailers Kalyan Jewellers and Malabar Gold & Diamonds have announced separate initiatives backing Prime Minister Narendra Modi’s appeal to stop buying gold amid growing concerns around India’s rising gold import bill and its impact on foreign exchange reserves and the current account deficit. Kalyan Jewellers on Monday launched its Nation First – Gold4India Initiative, a four pillar framework aimed at bringing idle household gold back into circulation through exchange, monetisation and reuse programmes. Malabar Gold & Diamonds, meanwhile, said it has submitted a proposal to the Government of India recommending reforms to strengthen the Gold Monetisation Scheme (GMS) and improve public participation in the programme. India imports nearly 700 to 800 tonnes of gold annually, according to Malabar Gold & Diamonds, while Indian households and institutions are estimated to hold between 25,000 and 35,000 tonnes of gold in the form of jewellery, coins and bars. Much of this remains economically idle. Read: Gold on hold: What’s the jewellery industry’s playbook after PM Modi’s call to curb gold buying? The companies said greater recycling, reuse and circulation of existing domestic gold could help reduce import dependence and limit foreign exchange outflows. Kalyan Jewellers said its initiative aims to reduce imports by five tonnes of gold during the financial year. “A stronger domestic recirculation ecosystem can sustain employment in the jewellery sector and help states preserve GST revenues linked to organised trade,” said T S Kalyanaraman, managing director, Kalyan Jewellers India Limited. “The ‘Nation First – Gold4India Initiative’ is far beyond just a promotional campaign.” The company’s initiative includes old gold exchange programmes, dedicated “Encash Gold” counters for monetisation services, grassroots awareness drives through its My Kalyan network and promotion of 18K jewellery as a more efficient form of gold consumption compared to traditional 22K jewellery. Kalyanaraman said the initiative seeks to shift consumer behaviour from viewing gold solely as a static asset to recognising it as a “renewable domestic resource capable of continuously generating economic value within the country.” Malabar Gold & Diamonds said the current Gold Monetisation Scheme has seen limited participation due to longer lock in periods, lower perceived returns, limited redemption flexibility and procedural challenges. The company has proposed measures including reducing the minimum deposit quantity from 10 grams to 1 gram, flexible redemption options in cash or gold, simplified Aadhaar based e-KYC procedures and integration of organised jewellers into the scheme under regulatory oversight. “India possesses one of the world’s largest privately held gold reserves while continuing to rely significantly on imports to meet domestic demand,” said M.P. Ahammad, chairman, Malabar Group. “With appropriate policy support and active integration of the organised jewellery sector, the Gold Monetisation Scheme can emerge as a highly effective mechanism for mobilising idle gold into the formal economy.” According to Malabar Gold & Diamonds, mobilisation of even 1% to 2% of India’s domestic gold holdings could potentially release 600 to 700 tonnes of gold into circulation, equivalent to a substantial portion of the country’s annual gold import demand.