MMTC PAMP Urges Better Gold Monetisation Scheme in India
By Business Desk
MMTC PAMP’s MD calls for an improved Gold Monetisation Scheme to unlock India’s 31,000 tonnes of dormant gold, boost recycling, and reduce import dependency.
Samit Guha, the managing director of MMTC PAMP, has urged India to implement a more attractive Gold Monetisation Scheme (GMS). This enhancement aims to significantly boost gold recycling efforts and reduce the nation’s reliance on substantial gold imports.
MMTC PAMP operates as India’s sole London Bullion Market Association-accredited gold refining unit, highlighting its central role in the domestic gold market.
Unlocking India’s Dormant Gold Reserves
Indian households hold an estimated 31,000 tonnes of gold, a vast reserve that largely remains outside the formal economy. Concurrently, India imports approximately 800 tonnes of gold annually, contributing to foreign exchange outflow.
- Indian households possess an estimated 31,000 tonnes of gold.
- India imports approximately 800 tonnes of gold each year.
- The country’s gold refining capacity stands at about 1,800 tonnes, currently underutilized.
An improved GMS could integrate a significant portion of this household gold into the formal market. This integration would not only stimulate recycling activities but also leverage India’s existing, underused refining capacity.
The Mechanism of Enhanced Gold Recycling
The government is actively collaborating with stakeholders to revamp the GMS, which saw limited success since its launch in 2015. The scheme’s goal is to mobilize idle household gold, converting it into productive assets.
MMTC PAMP currently recycles about 22 tonnes of gold annually. The company plans to increase this volume by 10-15% each year, anticipating substantial growth with an effective GMS.
- MMTC PAMP currently recycles about 22 tonnes of gold.
- The company plans an annual increase in recycling by 10-15%.
- Its refining capacity is 300 tonnes of gold and 600 tonnes of silver per year.
Increased domestic gold recycling offers a crucial benefit: it could help mitigate pressure on India’s current-account deficit. By reducing the need for new gold imports, it lessens the associated foreign exchange outflow.
Guha emphasized that recycling complements imports rather than replacing them entirely. He stated that India’s future gold strategy should prioritize efficient, transparent, and responsible monetization of its existing gold reserves.