Gold Monetisation Scheme Falls Short: Meagre 39 Tonnes Mobilised in a Decade

India's Gold Monetisation Scheme Falls Short of Expectations

India's Gold Monetisation Scheme (GMS), which was discontinued in parts in March 2025, has attracted a paltry 39 tonnes of gold deposits by November 2025, a mere fraction of the estimated 34,000 tonnes of gold held by Indian households. Despite operating for nearly a decade, the scheme has managed to mobilize a mere 0.1 percent of India's privately held gold stock, highlighting both the promise and limitations of the country's ambitious attempt to put idle gold to productive use.

The scheme's performance has been lackluster, with gold imports surging 24 percent in FY26, costing the country approximately $72 billion in foreign exchange, according to data from the Ministry of Commerce. Prime Minister Narendra Modi recently urged citizens to avoid buying gold for a year to help conserve foreign exchange amid global uncertainty.

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Industry bodies from the gems and jewellery sector are now planning to urge the government to revive and strengthen the Gold Monetisation Scheme. Analysis of official data reveals that gold deposits under the scheme rose from 6.5 tonnes in March 2017 to 39 tonnes by November 2025, while the number of gold accounts increased from 718 to 6,531.

The early years of the scheme saw the strongest momentum, with deposits more than doubling to 13.5 tonnes in March 2018. However, growth slowed markedly after the pandemic, with deposits rising by 9.8 percent in 2022, 9.5 percent in 2023, and just 3.3 percent in 2024, suggesting waning interest. A final rebound came in 2025, when deposits increased 25.3 percent before parts of the scheme were discontinued.

Long-term deposits became the dominant option over time, accounting for 49.2 percent of total deposits by November 2025, compared with 23.8 percent for short-term deposits and 27 percent for medium-term deposits. In absolute terms, long-term deposits stood at 19.2 tonnes, compared with 10.5 tonnes under medium-term deposits and 9.3 tonnes under short-term schemes.

The modest scale of mobilisation stands in stark contrast to India's continuing appetite for imported gold, which has become the country's second-largest import item after crude oil.

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