India’s gold demand witnessed a significant decline of 21% in 2016 at 675.5 tonne compared to the demand of 857.2 tonne in 2015. As per data compiled by World Gold Council (WGC) the fall in demand is mainly due to challenges including PAN card requirement, Excise duty on jewellery, demonetisation and the publicity around income disclosure schemes.
The jewellery demand in the country also witnessed a sharp decline of 22.4% in 2016, at 514 tonne compared to 662.3 tonnes in 2015. In value terms, jewellery demand saw a drop of 12.3% in 2016 at Rs 1,38,837.8 crore, from Rs 1,58,310.4 crore in 2015.
India is one of the largest gold importers in the world, and the imports mainly take care of demand from the jewellery industry. The fall in imports of precious metal is expected to keep a lid on the current account deficit.