Opinion Piece by Mayank Sharma, President and Head, Gold Loans, IIFL Finance: Supporting the Prime Minister's call through gold recycling, reuse and financialisation
MUMBAI, India, Sept. 21, 2026 /PRNewswire/ -- India's household gold stock, built over generations through weddings, inheritance and savings, holds the real answer to the country's import dependence on the metal, according to Mayank Sharma, President and Head, Gold Loans, IIFL Finance, who said "circulation" rather than "abstinence" should be the guiding principle of the country's gold economy.
Mayank Sharma, President and Head, Gold Loans, IIFL Finance said that Prime Minister Narendra Modi's recent appeal to Indians to hold off on buying new gold for a year, framed as a measure to ease pressure on foreign exchange reserves, points to a more structural opportunity -- recycling and reusing the gold Indians already own rather than importing more.
Gold remains India's second-largest import item by value, a trend that puts pressure on the rupee, widens the current account deficit and consumes foreign exchange needed for other national priorities, Sharma said, adding that the country is estimated to hold tens of thousands of tonnes of gold in private hands, most of which does not currently circulate through the formal economy in an organised, transparent manner.
He noted that industry, rather than mandate, is beginning to drive this shift. A leading gold jeweller has said close to 80 per cent of its gold demand is now met through customers exchanging old stock, reflecting how deeply recycling has embedded itself in retail gold buying. A newer generation of buyers is also increasingly seeking clarity on the provenance of their gold, signalling that responsible sourcing is fast becoming a mainstream expectation rather than a niche concern.
The World Gold Council has separately argued at the policy level that responsible domestic mining, combined with organised recycling, can meaningfully cut India's reliance on gold imports over time.
Sharma said that gold loans have emerged as one of the most efficient ways to keep gold liquid and productive without removing it from the economy. When a household pledges gold for credit instead of selling it, the gold stays within the country's stock while the credit unlocked supports working capital for small businesses, medical emergencies, education or farm input costs, he said, adding that this model has become a particularly dependable bridge to credit for MSMEs that often lack formal collateral.
He also pointed to the financialisaton of gold through ETFs and digital gold products, which allow Indians to hold gold's value without holding the physical metal, reducing physical import demand at the margin while preserving gold's traditional role as a hedge and store of value.
Taken together -- organised recycling, responsible sourcing, credit against existing stock and financialisaton -- these trends point to a gold economy that draws more on India's existing reserves than on fresh imports, Sharma said. He described this not as a call to stop buying gold but as a case for buying and using it differently, whether through exchanging old jewellery, borrowing against family gold instead of making a fresh purchase, or opting for digital gold.
While the Prime Minister's appeal addressed a real and urgent macroeconomic concern, the more durable solution to India's gold dependency lies in building the transparency, trust and infrastructure needed to treat the country's existing gold stock as a national resource that can be recycled, financed and circulated for years to come, Sharma said.
About IIFL Finance Limited
IIFL Finance is one of India's leading financial services companies, offering a comprehensive suite of products, including gold loans, business loans, home loans, microfinance, and other secured lending solutions. With a strong presence across urban and rural India, IIFL is committed to empowering individuals and businesses through accessible and affordable credit solutions.
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