Electronic gold receipts (EGRs), India's exchange-traded form of physical gold ownership, could eventually help reduce the country’s dependence on imported bullion by increasing the circulation of existing domestic gold stocks, according to a report in the National Stock Exchange’s (NSE) June 2026 edition of Market Pulse.
The report argues that India, despite holding one of the world’s largest private gold stocks, continues to import large quantities of the precious metal every year, putting pressure on the trade deficit and foreign exchange outflows.
India’s gold import bill touched $71.98 billion in FY2025-26, an all-time high and 24 per cent higher than the previous year, the report said.
Gold now accounts for more than 9 per cent of the country’s merchandise imports, second only to crude oil.
Against this backdrop, NSE said EGRs could offer a mechanism to make existing gold holdings more economically productive.
“EGRs do not eliminate gold demand. They do something more important. They channel it,” the report said.
What Are EGRs
EGRs are exchange-traded instruments representing ownership of physical gold stored in Securities and Exchange Board of India (Sebi)-accredited vaults. Investors can buy and hold them in demat accounts in denominations as small as one gram.
The NSE had launched trading in EGRs on May 18, 2026.
The receipts can be traded on the exchange and can also be converted into physical gold through a rematerialisation process. According to the exchange, EGRs allow investors to own standardised and assayed gold without concerns related to purity, storage or making charges.
The report noted that EGRs provide a “physically-backed, exchange-settled instrument” that can be used by investors and institutions while remaining within the regulated market ecosystem.
Improving the ‘Velocity’ of Gold
The exchange’s central argument is that gold already available within the country can serve multiple economic purposes if it circulates through a regulated electronic framework.
“Every gram of gold that circulates inside the EGR ecosystem, whether traded between investors, lent within the market, or used to back an exchange-traded fund (ETF) unit, is a gram that does not need to be freshly imported,” the report said.
According to the NSE, the same vaulted gold can potentially support investment demand, collateral requirements, settlement obligations and, eventually, jewellery demand. The report describes this as increasing the “velocity” of domestic gold.
“As liquidity deepens, the same vaulted gold can service multiple economic functions,” it said, adding that higher circulation of existing gold could reduce the marginal demand for imports.
For a country carrying a gold import bill of nearly $72 billion, even modest improvements in domestic gold utilisation could offer relief to the current account, the exchange said.
India Owns The Gold, But Not The Price
The report estimates that Indian households hold nearly 25,000 tonnes of gold, valued at around Rs 375 lakh crore, while temples hold another 3,000-4,000 tonnes. Yet, despite being among the world’s largest consumers and holders of gold, India continues to derive its domestic prices from international benchmarks.
“Every morning, traders in London publish the LBMA fix. Indian markets convert that figure into rupees, add customs duties, goods and services tax (GST), freight and intermediary spreads, and call the result the price of gold in India,” the report said.
NSE argued that EGRs, together with domestic spot price mechanisms and the India International Bullion Exchange at GIFT City, could gradually help India move from being a price taker to a contributor in global gold price discovery.
The Digital Gold Vision
One of the more forward-looking sections of the report outlines what the exchange calls “gold on a digital rail”. The report imagines a scenario where a customer purchasing jewellery transfers EGR units directly to a jeweller through a demat account instead of paying in cash.
“Vaulted gold quietly changes ownership,” the report said, adding that such a framework could eventually integrate with India’s digital payment infrastructure.
The exchange said an EGR-based payment system could allow existing domestic gold stocks to circulate without requiring fresh imports for every transaction.
“When that happens, the jeweller no longer needs to import a kilogram of fresh gold to meet customer demand,” the report said.
According to the exchange, India’s existing vault infrastructure, depository framework and digital payment ecosystem provide some of the building blocks for such a system, although its implementation would require further regulatory and market development.
Growing Financial Demand For Gold
The report also highlighted the rising popularity of financial forms of gold ownership. According to the NSE, gold ETF folios crossed 11.44 million by January 2026, while assets under management nearly tripled during 2025 to exceed Rs 1.30 lakh crore. Cumulative ETF holdings reached 116.50 tonnes by March 2026.
The exchange said EGRs represent the next stage in the financialisation of gold ownership, allowing investors to own physical gold in electronic form while keeping it within a regulated market structure.
While the report does not estimate the potential reduction in imports, it argues that improving the circulation and usability of domestic gold stocks could eventually reduce the need for fresh bullion imports. “The Indian household effectively monetises a portion of its 25,000 tonne stockpile, not by surrendering it, but by making it productively transactable,” the report added.
