India's Gold Market Stuck in Low Gear, SEBI ED Warns of Missed Opportunities

India's Executive Director of SEBI, Ram Mohan Rao, has expressed concerns over the country's reliance on physical gold imports and its limited participation in global bullion price discovery. According to him, only about 2% of India's fresh gold imports are routed through exchange mechanisms, with around 17 tonnes delivered last year compared to 780 tonnes imported.

Rao emphasized the need for India to move beyond being one of the world's largest consumers of gold and build a larger role in global bullion price discovery. He suggested that India's scale of demand gives it an opportunity to play a much larger role in global bullion markets, but achieving this would require deeper liquidity, stronger market infrastructure, and greater participation from domestic and international players.

The SEBI ED highlighted the significant headroom for deeper integration between India's physical gold market and financial markets. He pointed out that around 25,000-30,000 tonnes of gold is held privately in India, which could potentially be monetized and brought into the formal financial ecosystem through digital and financial structures.