Indian gold consumer demand soared to its highest
level in 8 years: Zerodha Fund House
Mumbai, 29 April 2025: On the occasion of Akshaya
Tritiya, Zerodha Fund House notes that in India, gold is far more than just a
precious metal with its significance deeply ingrained in the country’s history
and culture. The last three decades have seen India's relationship with gold
develop in notable ways. From a demand of 340 tonnes in 1992, the nation's
appetite for Gold surged to more than 800 tonnes by the end of 2024.
India Stands as the Largest Consumer for Gold
Jewellery In 2024
In 2024, India stands as the largest consumer of gold jewellery globally, with
consumption reaching more than 563 tonnes with the annual demand valued
at ₹3.6 lakh crores. Gold jewellery remains an integral part of India's
cultural fabric, used in celebrations from grand weddings to auspicious
festivals, symbolizing tradition and prosperity.
India's Appetite for Gold Coins and Bars is Among
the Strongest Globally
Beyond its aesthetic appeal, gold holds a prominent position
in India's investment landscape. Both urban and rural consumers alike recognize
its enduring value as a reliable store of wealth. This conviction is evident in
India's strong appetite for gold coins and bars, with investment reaching about
239 tonnes in 2024, second only to China. In INR terms, this translates to
a demand of ₹1.5 lakh crore, a significant 60% increase over the
previous record set in 2023, demonstrating a broadening investment interest.
Indian Gold ETF Holdings Up by Over 200% in 5 Years
There's a growing inclination towards regulated
investment avenues such as Gold ETFs and related funds. Gold ETF holdings
refers to the total amount of gold that is held by the various Gold ETFs listed
and traded on Indian stock exchanges. The substantial growth in ETF holdings
from about 21 tonnes to more than 63 tonnes suggests that Gold ETFs might be
becoming an increasingly important avenue for Indians to gain exposure to gold
as an asset class, alongside traditional methods like buying jewelry or
physical gold. It may also suggest a greater demand for gold as an investment
vehicle in its dematerialized form in the Indian market.
Indian Gold ETF Folios Up by More Than 13x in 5
Years
The number of Gold ETF folios has witnessed more than a 13-fold increase from
March 2020 to March 2025, offering investors a convenient and efficient way to
participate in the gold market without the hassle of physical storage.
When it comes to taxation, Gold ETFs are taxed similar to equities. LTCG is
taxed at flat 12.5% after 12 months of holding. On the other hand, STCG is
taxed as per slab rates. In case of Physical Gold - the LTCG is taxed at 12.5%
if held for more than 24 months and STCG is taxed as per Slab Rate.
Vishal Jain,
CEO of Zerodha Fund House said, “The growth of Gold ETFs in India signifies a
growing investment landscape where investors are increasingly embracing the
ease and accessibility of gold through the mutual fund route.”
|
Class of Gold Asset |
Taxation on Capital Gains |
Holding Period |
|
Gold ETFs (similar to equities) |
12.5% - LTCG |
12 months |
|
Physical Gold |
12.5% - LTCG |
24 months |
Sources:
India’s Gold Consumer Demand (“Consumer” Sheet - From year
2016 to 2024)
About
Zerodha Fund House:
Zerodha AMC is the Asset Management Company for the schemes of Zerodha Fund
House and a joint venture between Zerodha Broking Ltd and Smallcase Technologies
Pvt Ltd. Zerodha Fund House will enable a new generation of investors to access
the capital markets with the same principles of simplicity, cost-effectiveness,
and transparency to investment products as its parent organizations.
Learn more at https://www.zerodhafundhouse.com/
Disclaimer: This is not investment advice or
buy or sell recommendation. Readers should do their own research and analysis
or consult an investment adviser/s before investing in schemes of mutual funds.
Past performance may or may not sustain in future and should not be used as a
basis for comparison with other investments.
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