Malabar Gold & Diamonds has presented a detailed proposal to the Indian government aimed at enhancing the Gold Monetisation Scheme (GMS). The jeweller emphasized the importance of responsible gold consumption and advocated for improved utilization of domestic gold resources to bolster the country’s economic resilience.
The proposal was delivered by M.P. Ahammad, Chairman of Malabar Group, to Finance Minister Nirmala Sitharaman and Commerce & Industry Minister Piyush Goyal. It outlines actionable measures designed to boost public participation in the GMS, mobilize idle gold into the formal economy, and promote greater recycling, reuse, and circulation of existing gold within India.
India imports approximately 700 to 800 tonnes of gold each year, resulting in substantial foreign exchange outflows and exerting pressure on the current account deficit. Meanwhile, it is estimated that Indian households and institutions collectively hold between 25,000 and 35,000 tonnes of gold as jewellery, coins, and bars, much of which remains underutilized.
Malabar Gold & Diamonds stressed the potential benefits of recycling, exchange, reuse, and monetization of domestic gold holdings, which could significantly reduce import dependency, curb dollar outflows, and strengthen the nation’s economy over time. Ahammad stated, “With appropriate policy support and active integration of the organized jewellery sector, the Gold Monetisation Scheme can emerge as a highly effective mechanism for mobilizing idle gold into the formal economy.”
Despite the GMS’s objective to minimize import reliance and monetize dormant gold assets, the proposal indicates that public engagement has been limited due to prolonged lock-in periods, lower perceived returns, restricted redemption options, and procedural hurdles.
To increase the scheme’s effectiveness and adoption, the proposal suggests integrating organized jewellers into the GMS framework under regulatory oversight. Recommendations include reducing the minimum deposit quantity from 10 grams to 1 gram, offering flexible redemption options in either gold weight or cash, shortening lock-in periods, and enhancing liquidity options.
Furthermore, the proposal advocates for a jeweller-assisted collection and facilitation framework operating under bank and regulatory supervision, supported by digital tracking systems and transparent processing mechanisms to boost customer confidence and operational efficiency.
Mobilizing even 1 to 2 percent of India’s domestic gold holdings could potentially release about 600 to 700 tonnes of gold into circulation, which would satisfy a substantial portion of the nation’s annual gold import needs.
The proposal was published on May 13, 2026.
