Summary of this article
Jewellers are likely to be included under the revamped scheme to collect household gold
The government aims to reduce gold imports and improve participation
India imported a record $71.98 billion worth of gold in FY26
The central government is likely to announce a revamped Gold Monetisation Scheme (GMS) within the next two weeks, according to a Moneycontrol report. The report said the government is considering allowing jewellers to act as collection partners to help bring more idle household gold into the formal financial system.
Under the proposed framework, jewellers across the country would be allowed to collect gold deposits from households and route them through the banking and refining system. At present, only banks can accept such deposits under the scheme. According to the report, the revamped framework is expected to help mobilise more than 1,000 tonnes of gold.
The report said the proposal follows a series of meetings involving senior government ministers, Reserve Bank of India (RBI) officials, banks and representatives of the bullion industry. Industry executives told the publication that the government is looking to improve participation in the scheme before the festive season, when gold demand usually picks up.
India is among the world's largest consumers of gold, much of which remains locked away in homes and temples. Indian households hold an estimated 25,000 tonnes of gold, according to NSE's June 2026 Market Pulse. That is more than the combined gold reserves of the world's 10 largest central banks. At current prices, these holdings are valued at about Rs 375 lakh crore, or $4.46 trillion. Including the 3,000-4,000 tonnes held by temples and other institutional holdings, India's total gold stock is estimated at nearly $5.2 trillion, equivalent to around 125 per cent of the country's nominal GDP.
Despite these vast domestic holdings, India continues to rely heavily on imported gold. The country's gold import bill rose to a record $71.98 billion in 2025-26, up 24 per cent from the previous year, according to the NSE report. Gold accounted for more than 9 per cent of India's merchandise imports, second only to crude oil. The report also noted that India's trade deficit widened to $333.2 billion in FY26, with rising bullion imports adding to pressure on the current account.
The Gold Monetisation Scheme was launched in 2015 to reduce India's dependence on gold imports. It encouraged households and institutions to deposit idle gold with banks and earn interest on it. At maturity, depositors could choose to receive either physical gold or its value in cash, depending on the type of deposit.
The scheme, however, saw limited participation. By March 2025, only about 38 tonnes of gold had been brought into the scheme, despite India's large gold holdings. Industry executives estimate that the total has increased only slightly to around 39 tonnes after more than a decade.
Under the proposed revamp, jewellers would collect gold from households, conduct an initial purity check and then send it to authorised refiners and banks. In return, they are expected to receive a service fee for mobilising deposits and processing transactions.
The government discontinued the medium- and long-term deposit options under the Gold Monetisation Scheme on March 26, 2025. At present, only the Short-Term Bank Deposit option, with a tenure of one to three years, is available. According to the report, the government is expected to announce the revamped scheme after completing consultations.
The proposed revamp comes weeks after Prime Minister Narendra Modi urged citizens to avoid buying gold for a year. The appeal was made during heightened uncertainty arising from the conflict in West Asia, when concerns over higher imports and pressure on India's external balance had increased. RBI said in its latest Financial Stability Report that growth in gold imports "decelerated substantially" in May compared with the previous month. The report's data showed gold imports at around $12 billion in May, the third straight monthly decline.
