Summary of this article
Many Indians have moved on from traditional gold investments
EGRs are flexible and can be traded as stocks or converted to physical gold
By Chakravarthy V
Gold has always held a special place in the Indian psyche. It sits in lockers, is passed down generations and is present in every wedding, festival and milestone. But the way Indians invest in Gold has been quietly changing - from physical coins and bars to Gold ETFs and Sovereign Gold Bonds. Now, there is a new entrant quietly entering the room - Electronic Gold Receipts or EGRs.
NSE’s EGR segment went live in May 2026, but the product is not entirely new. BSE had introduced India’s first EGRs during Muhurat trading back in 2022, after SEBI approved a framework for spot gold trading. But despite the head start, EGRs haven’t exactly made a mark in the mainstream. Gold ETFs, by comparison, saw their AUM grow a staggering 2,600 per cent over the last decade to Rs 1.7 lakh crore by March 2026. EGRs, in that time, haven't generated enough trading volume to even make for a meaningful comparison.
So What Exactly Is an EGR?
Think of it as demat gold. Just as shares sit in your demat account, an EGR is a digital certificate representing physical gold stored in a SEBI-accredited vault. You - whether a jeweller, a refiner, or a regular retail investor - can deposit gold with a registered vault manager who verifies its purity and weight, stores it securely, and credits EGRs to your demat account. From that point, you hold a digital claim on real, certified gold.
What makes EGRs genuinely useful is the flexibility they carry. You can trade them on the stock exchange just like a stock, or convert them back into physical gold whenever you want - right down to the certified weight and purity. There's also a feature called interoperability, which means you can deposit gold in Ahmedabad and redeem it from a vault in Mumbai without any friction. Each EGR represents a standardised quantity - 1 gram, 10 grams, 100 grams, or up to 1 kilogram - and can be bought in units as small as 100 mg, which works out to roughly Rs 1,500 at current gold prices.
On paper, the product sounds almost too good. Certified purity, digital convenience, exchange-traded liquidity, and the option to take physical delivery when you need it. It addresses gaps that Gold ETFs and digital gold both leave open. So why has it struggled to find takers?
The Awareness Gap That Held EGRs Back
A few reasons come together here, and the most obvious one is awareness. Most retail investors and even many financial advisors simply didn't know EGRs existed. Gold ETFs had the marketing momentum, the mutual fund distribution network, and years of brand familiarity behind them. EGRs had none of that. The vault infrastructure was also limited early on, with only three approved vault managers operating nationally, making it physically inconvenient for most investors to deposit or withdraw gold.
Then there's the cost structure, which is less clean than what Gold ETF investors are used to. With ETFs, you pay an expense ratio, and you're largely done. With EGRs, you also pay vaulting and storage charges for the duration you hold them. If you eventually want physical delivery, there are additional logistics charges on top. And a 3 per cent GST kicks in the moment you convert your EGR back into physical gold - unavoidable if taking delivery is your final goal. None of these costs is hidden exactly, but they aren't as neatly bundled as investors have come to expect from modern financial products.
Why Right Now Might Be the Right Time
Despite the slow start, the timing of NSE's renewed EGR push could prove significant. Sovereign Gold Bonds - long considered the gold standard of gold investments for their tax efficiency and annual interest income - appear to have been quietly discontinued by the government, largely due to the high cost they impose on the exchequer. That leaves a meaningful gap in the market for investors who want gold price exposure alongside the eventual option of physical delivery, something Gold ETFs alone simply cannot offer.
EGRs occupy that space rather neatly. They aren't trying to replace Gold ETFs for the investor who wants pure price exposure and daily liquidity. But for someone looking to accumulate gold digitally over time and eventually convert it into jewellery or bars for a family wedding or occasion, EGRs offer a path that no other regulated product currently does.
Built for Business, Open to Everyone
It's also worth understanding what EGRs were originally designed for. The system was largely built with commercial players in mind - jewellers, refiners, and bullion traders who regularly move large quantities of gold and deal with storage risks, regional price differences, and purity verification challenges. EGRs solve all of those problems elegantly, since the gold is standardised, electronically traded, and stored in regulated vaults.
That doesn't mean retail investors are excluded. But the product's design and cost structure do lean toward larger, more frequent users, which explains why the experience hasn't felt as seamless as opening a mutual fund app and buying a Gold ETF in three taps. For retail participation to truly grow, the ecosystem - brokers, advisors, vault networks - will need to catch up.
Final Thought!
Whether EGRs eventually become the new normal of gold investing depends on a few things coming together: deeper vault infrastructure, broader broker and advisor awareness, and sustained effort from NSE to bring its enormous retail network into the fold. NSE crossed 13 crore unique registered investors earlier this year, growing at a CAGR of 26 per cent over the last five years. That's a distribution base with the potential to change the EGR story in a way BSE's early, quieter launch simply couldn't.
For the retail investor today, EGRs make the most sense as a slow accumulation vehicle - buying small quantities over time and converting into physical gold only when there's a real need for it. The purity is guaranteed, the quantities are flexible, and the process is regulated end-to-end.
Author of this article is the Cofounder & Co-founder, Prime Wealth Finserv Pvt. Ltd.
(Disclaimer: Views expressed are the author’s own, and Outlook Money does not necessarily subscribe to them. Outlook Money shall not be responsible for any damage caused to any person/organisation directly or indirectly.)
