Rise of Gold Recycling Industry in India

Highlighting the boom in above-ground gold recycling amid current market dynamics

Rise of the Gold Recycling Industry in India

Amid record-high gold prices, India is witnessing a remarkable shift in the gold recycling market—from households, jewelers, and even industrial players.

📈 India’s Recycling Boom

• India recycled 75 tonnes of gold in 2021, ranking 4th globally in gold recycling en.wikipedia.org+14thehindu.com+14timesofindia.indiatimes.com+14.

• Refining capacity soared from 300 t in 2013 to 1,800 t by 2021—a 500% jump businesstoday.in+3livemint.com+3outlookbusiness.com+3.

• In Ahmedabad alone, recycling increased by 75% over two years, averaging 70 kg per day recycled by 2022 timesofindia.indiatimes.com.

🛠 Why Is Recycling Surging?

1. High Gold Prices
   When gold prices rise (~₹74,500/10 gm in 2023), consumers increasingly sell or swap old jewelry instead of buying new thehindu.com+12reuters.com+12reuters.com+12.

2. Changing Consumer Behavior

   • Younger buyers hold, change, or exchange jewelry faster (holding periods fell from 8–10 yrs to 3–5 yrs) .

   • Many prefer to pledge gold for loans rather than outright selling, unless needing liquidity thehindu.com+4gold.org+4outlookbusiness.com+4.

3. Formalizing the Sector

   • Organised refiners rose from fewer than 5 to 33 by 2021 en.wikipedia.org+2en.wikipedia.org+2gold.org+2reuters.com+15business-standard.com+15timesofindia.indiatimes.com+15.

   • Pollution control curbed unorganised local furnaces, while tax incentives boosted formal operations outlookbusiness.com+5gold.org+5thehindu.com+5.

🌐 Impact on Imports & Market

• Scrap supply accounted for ~11% of total gold supply over 5 years newindianexpress.com+7livemint.com+7outlookbusiness.com+7.

• In Q1 2024, scrap supply jumped 10%, contributing significantly to a 20% drop in imports — a major shift in gold sourcing .

🧩 Challenges & Opportunities

Challenges:

• Most gold recycling is still informal and cash-driven, limiting scale newindianexpress.com+13gold.org+13thehindu.com+13.

• GST is irreversible, creating a barrier for consumers selling old jewelry reuters.com+3outlookbusiness.com+3gold.org+3.

• Small jewellers lack access to organised collection networks newindianexpress.com+13gold.org+13outlookbusiness.com+13.

Opportunities:

• Revamped Gold Monetisation Schemes (GMS) could integrate recycling, boosting participation en.wikipedia.org+10livemint.com+10thehindu.com+10.

• Fintech-powered scrap collection and traceable refining can formalise flows and improve trust.

• Export hubs: India’s enhanced refining capacity (1,800 t) supports becoming a global bullion hub reddit.com+3livemint.com+3tradingnewsdaily.com+3.

💡 What It Means for You

• Consumers: Selling old jewelry can finance new purchases with minimal cost—just pay making charges, and avoid full import costs.

• Investors: Recycling reduces import demand and eases trade deficit pressures—monitor trends.

• Entrepreneurs: Opportunities lie in building tech-based collection networks, scaling up formal refining, and enabling a sustainable circular gold economy.

🏁 Final Thought

India’s gold isn’t just in vaults—it’s circulating and being repurposed at increasing scale.

The rise of formal gold recycling offers a win-win:

• Consumers save.

• The economy imports less.

• Innovators gain from new value chains