Gold Refinery in India

India has consistently ranked among the top importers of gold globally. According to data from the World Gold Council, India imported over 800 tonnes of gold in 2021, exceeding even China which is the world’s largest gold consumer overall.

The majority of gold imports into India come in the form of gold bars. Strict regulations prohibit import of other gold items like coins or medallions. Only certain government entities and agencies are authorized by the Reserve Bank of India to import gold bars into the country. This includes MMTC, State Trading Corporation, HHEC and other export bodies.

Imports mainly arrive at three designated ports – Mumbai, Chennai and Ahmedabad. Imported shipments are subject to quality testing by BIS-approved assayers to verify the purity meets standards before being allowed into the country. If found to be of subpar quality, consignments can be returned or re-exported.

Most gold entering India is refined further by domestic refineries before being distributed to jewelers and other intermediaries. While imports supply a bulk of gold consumption, recycled scrap from old jewelry and other sources also provides a supplementary source.

In past years, the government introduced various policies attempting to restrict gold imports to narrow the trade deficit. These included increased import duties, requiring a portion of purchases from domestic sources, and limiting the amount of gold that can be imported.

However, India’s cultural affinity for gold as an offering in religious ceremonies and inclusion in weddings means demand often outstrips domestic supply. Robust smuggling activity and alternative channels like hawala also provide alternate gold supply outside formal borders to bridge shortfalls. The lure of profits ensures gold continues flowing into the country’s thriving bullion market.