India’s illegal gold imports surge 1,500%

India’s gold demand is anticipated to plummet to a six-year low in 2026, according to the World Gold Council (WGC). The leading consumer of gold globally, after China, is facing challenges due to soaring living costs resulting from the Iran conflict, coupled with a weak monsoon season. Sachin Jain, CEO of WGC’s Indian division, revealed to Reuters that jewelry demand dwindled in the first nine months of the year, consequently bringing the overall demand down to approximately 650 metric tons—the lowest figure since 2020 when the COVID-19 pandemic led to the closure of jewelry stores.

Jain reported a 29 percent year-on-year decline in gold demand, with jewelry purchases dropping by 20 percent and investment demand reducing by 40 percent. The September quarter saw a 162.5 metric ton decrease in gold demand. Despite this downward trend, Jain anticipates a rebound in demand during the December quarter, as significant festivals like Diwali and wedding season are expected to boost gold purchases.

However, high prices and the adverse effects of a poor monsoon are anticipated to cap demand, according to the WGC's report.

Over half of India's gold demand stems from rural areas, where jewelry serves as a traditional wealth store for millions. The monsoon delivered its weakest rainfall in over a decade in 2026, which has adversely impacted agricultural production and reduced farmers' incomes. Importantly, India’s gold imports dwindled in the September quarter, partly attributed to a rise in unofficial inflows following the government's recent escalation of import duties on the precious metal.