Overview
On September 21, 2026, Mayank Sharma, President and Head of Gold Loans at IIFL Finance, issued an opinion piece supporting Prime Minister Narendra Modi’s request that Indians refrain from buying new gold for a year. Sharma argues that the solution lies in recycling and financially leveraging the existing household gold stock rather than curbing demand through abstinence.
Macro Context
Gold is India’s second‑largest import by value, a trend that pressures the rupee, widens the current‑account deficit and consumes foreign‑exchange reserves needed for other priorities. The country is estimated to hold tens of thousands of tonnes of gold in private hands, much of which does not circulate through the formal economy.
Industry Shift Toward Recycling
Sharma cites a leading gold jeweller that now meets close to 80 % of its gold demand through customers exchanging old jewellery, indicating that recycling has become a mainstream component of retail gold buying. He also notes a growing consumer demand for provenance and responsible sourcing, a trend reinforced by the World Gold Council’s policy‑level advocacy for domestic mining and organised recycling to cut import reliance.
Role of Gold Loans
Gold loans, according to Sharma, keep gold liquid within the country while unlocking credit for working‑capital needs such as small‑business operations, medical emergencies, education or farm inputs. By pledging gold instead of selling it, households retain ownership, and the loan mechanism serves as a dependable bridge to credit for MSMEs lacking formal collateral.
Financialisation of Gold
Sharma highlights the emergence of gold ETFs and digital gold products, which allow investors to capture gold’s value without holding the physical metal. These instruments reduce marginal physical import demand while preserving gold’s function as a hedge and store of value.
Integrated Solution
Combining organised recycling, responsible sourcing, credit against existing stock and financialisation, Sharma envisions a gold economy that draws more on India’s existing reserves than on fresh imports. He frames the approach not as a call to stop buying gold, but as a shift toward buying and using it differently—through exchange of old jewellery, borrowing against family gold, or opting for digital gold.
About IIFL Finance
IIFL Finance Limited is a leading Indian financial services company offering gold loans, business loans, home loans, micro‑finance and other secured lending solutions, with a strong presence across urban and rural India.