Elevated bullion prices and diminished rural purchasing power are projected to reduce India's total gold demand to about 650 metric tons in 2026. The downturn was pronounced in the September quarter, when overall demand plummeted 29% year-on-year to 162.5 metric tons. Agricultural distress, high import taxes, and broader inflationary pressures continue to suppress traditional holiday buying. Furthermore, the elevated duties enacted earlier in the year curtailed official shipments and spurred unofficial inflows.
Key points
Full-year gold consumption is projected to hit a six-year low of approximately 650 metric…: Full-year gold consumption is projected to hit a six-year low of approximately 650 metric tons.
Weakened agricultural output severely impacts the market because rural areas generate ove…: Weakened agricultural output severely impacts the market because rural areas generate over half of national gold demand.
Higher import duties reduced official gold imports while driving up unofficial market inf…: Higher import duties reduced official gold imports while driving up unofficial market inflows across the country.
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Meanwhile, India's gold demand is expected to fall to a six-year low in 2026, as elevated prices weigh on jewellery sales and investment demand moderates.
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The country, the world's biggest gold consumer after China, is grappling with rising living costs in the wake of the Iran war, while a weak monsoon could curtail rural demand for jewellery.
Jewellery demand fell in the first nine months of the year, which will drag down total demand to around 650 metric tons, the lowest since 2020 when the COVID-19 pandemic forced jewellery shops to close, Sachin Jain, chief executive of the WGC's Indian operations.
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Gold demand fell 29% year-on-year to 162.5 metric tons in the September quarter, as jewellery purchases declined 20% and investment demand dropped 40%, Jain said.
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