The Centre is considering a plan to allow jewellers to participate in a revamped version of the Gold Monetisation Scheme (GMS) to mobilise some of the nearly 30,000 tonnes of the precious metal lying idle with Indian households. According to reports from The Economic Times, this initiative seeks to reduce India's reliance on imported bullion, especially with gold prices and import duties impacting jewellery demand. The proposal has gathered momentum after a series of meetings among senior ministers and representatives of the Reserve Bank of India, banks and the industry over the past fortnight. As per The Times of India, the move is aimed at making the programme more attractive and improving its uptake, marking the first time jewellers are being included in the scheme.
Finance ministry officials admit that the scheme's biggest hurdle has never been convenience - it has been trust. As a government source told Moneycontrol, "The problem in mobilising household gold is that tax concerns arise and people worry that questions may be asked once they bring their gold into the formal system. People need to be comfortable that participating in the scheme will not expose them to unnecessary scrutiny. As a result, many households are reluctant to mobilise or declare their gold holdings. That remains one of the biggest challenges." The earlier scheme failed to gain scale because the collection process was cumbersome, requiring households to physically visit designated collection centres, have jewellery melted or assayed for purity, complete extensive KYC documentation, and then open specialised gold deposit accounts through banks.
The revamped GMS is expected to be announced in August, as reported by The Economic Times. Industry executives noted that the proposal is being pushed ahead of the festive season as soaring gold prices and high import duty continue to weigh on jewellery demand, straining the country's import bill. According to The Times of India, the government is keen to roll out the revamped scheme before the festive season, as high gold prices and high import duties continue to dampen jewellery demand and add pressure to the country's import bill. A senior gold trade executive who attended all the meetings confirmed that the government is actively considering including jewellers in the scheme to help bring out the idle gold from Indian households.
Discussions involving ministers, the RBI, banks, and industry representatives are underway, with an announcement anticipated before the festive season. As reported by The Times of India, under the proposed model, jewellers would function as collection and aggregation centres, routing the gold to authorised refiners and banks while maintaining transparency and traceability throughout the process. In return, they are expected to receive a service or handling fee for mobilising household gold, conducting purity assessments, processing deposits and facilitating transactions. This will be the first time that the participation of jewellers is being sought in the scheme, with their involvement expected to boost the appeal of the flagging scheme and contribute to the government's broader push to reduce India's dependence on imported gold.
Despite being in operation for 11 years, the Gold Monetisation Scheme (GMS) has succeeded in mobilising only 39 tonnes of gold from Indian households by November 2025, according to official data. Introduced in 2015, the scheme was designed to encourage households and institutions to deposit idle gold into the formal financial system, allowing deposits starting from 10 grams with no upper limit. However, the programme has since been scaled back, with only the Short-Term Bank Deposit (STBD) option, with tenures ranging from one to three years, remaining in force after the government discontinued the medium- and long-term deposit variants from March 26, 2025. According to The Times of India, the RBI noted that growth in gold imports decelerated substantially in May 2026 compared with the previous month, with gold imports estimated at around $12 billion during the month.
The initiative comes as part of the government's response to address the widening balance of payments deficit. According to The Economic Times, trade sources indicated that the bullion industry had proposed several measures to the government to unlock idle household gold to address this concern. The scheme represents a significant shift in India's approach to gold management, moving beyond traditional government-led initiatives to include private sector participation. As per The Times of India, access to monetised domestic gold would provide jewellers with a dependable and relatively lower-cost source of raw material, reduce reliance on imported bullion, improve inventory management and lower financing expenses. The government's effort is to remove operational bottlenecks that held back the earlier scheme, with jewellers' retail presence and customer relationships expected to encourage more households to bring idle gold into the formal financial system.
