PM Modi has appealed to Indians to prefer gold recycling instead of buying new gold. The reason is to use what India already has instead of purchasing from overseas. Currently, Indian households and temples have $3.8 trillion of gold that is unused and sitting in lockers. If this gold comes into the market, it would boost the formal economy.
Also, Swastika Investment Research Head, Meena, said that gold recycling will help to ease pressure on foreign exchange reserves and narrow the current account deficit.
Small Shift Will Create A Huge Impact
There is no doubt that even if a small change in gold recycling creates a meaningful impact and will boost the Indian economy and save foreign reserves, this would also decline gold imports by almost 30 percent.
Also, recycling one percent of Indian household gold will reduce imports by 33 percent and will offer policy support. These reductions would strengthen macroeconomic stability and would create more activity in jewellery manufacturing.
Industry analysts think that the trend is moving in the direction of Gold recycling, where Indians have exchanged gold or sold gold to fund weddings, higher education for their kids, or for property buying. Exchanging old jewellery for a new design is also seen as a common practice for years.
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