India has emerged as the fourth largest recycler in the world and the country has recycled 75 tonnes in 2021, according to a World Gold Council (WGC) report.
Key highlights of the report
China topped the global gold recycling chart as it recycled 168 tonnes
Italy at the second position with 80 tonnes and,
The US in the third rank with 78 tonnes in 2021.
The report was titled as 'Gold refining and recycling’.
India’s stand in the report:
India's gold refining capacity increased by 1,500 tonnes (500 per cent) in 2021.
The gold refining landscape in the country has changed over the last decade, with the number of formal operations increasing from less than five in 2013 to 33 in 2021.
Due to the government's tightening of pollution regulations, the scale of unorganised refining has fallen.
Tax advantages have underpinned the growth of India's gold refining industry like the import duty differential.
Significance for India
India has the potential to emerge as a competitive refining hub if the next phase of bullion market reforms promotes responsible sourcing, exports of bars and consistent supply of the scrap.
Gold scrap’s share of overall imports has risen from 7 per cent in 2013 to around 22 per cent in 2021 which is a sign of growth to India’s market.
The World Gold Council
It is a leading organisation in the gold industry committed to shape the conversation around gold and creating a brighter future for all.
The World Gold Council is the market development organisation for the gold industry.
It works across all parts of the industry, from gold mining to investment, and their aim is to stimulate and sustain demand for gold.
The World Gold Council is an association whose members comprise the world’s leading gold mining companies.
It helps to support its members to mine in a responsible way and developed the Conflict Free Gold Standard.
Advantages for India
Modernisation and changing scenario: Holding periods of jewellery will continue to decline as younger consumers look to change designs more frequently, a trend that could contribute to higher levels of recycling.
Higher incomes and economic growth: Stronger economic growth will reduce outright selling and consumers will find it easier to pledge their gold rather than sell it outright.
Suggestions for India
Governmental support: The domestic recycling market is relatively less organised but should gain support from initiatives such as revamped GMS (Gold Monetisation Scheme).
Role of Currency: The various policy measures sync to make it attractive to bring surplus gold mainstream and liquidity is enhanced via bullion exchanges.
Organised recycling: It is necessary to support organised recycling with better incentives and tech-based solutions encompassing the gold supply chain end-to-end.
Concerns for India
Low domestic recycling: India recycles little of its own stock of gold - about 8 per cent of the global scrap supply.
Economic fluctuations: Recycling is driven by current gold price movements, future price expectations and the economic backdrop.