Elevated gold prices prompted consumers to exchange old jewellery rather than put fresh money into advance purchase schemes in FY26, sharply reducing deposits collected by India’s leading jewellers for the second consecutive year. The money collected as deposit at market leader Titan’s Tanishq chain fell 39% year-on-year to ₹2,116 crore in FY26, nearly double the 19% decline a year earlier. Reliance Retail reported a 25% year-on-year drop in money collected to ₹250 crore, compared with a 4.5% fall in 2024-25, as per its annual report.
Privately held Jos Alukkas, which has 67 stores in southern India, also reported a 25% fall in deposits last fiscal, against a 5% decline the previous year.
Jewellers attributed the sharper decline to the steep rise in gold prices last fiscal, which prompted consumers to monetise existing gold through exchanges rather than make fresh purchases. Jewellers reported up to a 35% year-on-year increase in purchases through exchange schemes. “The big surge in gold prices has changed the gold purchasing habit in India,” said Varghese Alukkas, managing director, Jos Alukkas. While deposits in customer-facing gold schemes fell in 2025-26, the contribution of old gold exchange to Jos Alukkas’ sales surged to 65% during the fiscal from about 45% a year earlier. “This is helping the country’s economy to lower gold imports and unlock household gold,” Alukkas said. Advance purchase schemes, which allow consumers to make monthly payments towards a future jewellery purchase, have been an important tool for driving gold consumption among middle- and lower-income households. The trend began weakening in FY25 as gold prices rose sharply.In FY25, gold prices increased about 20%, but surged about 56% last fiscal, driven by strong buying by central banks, geopolitical uncertainty and rupee depreciation. Titan said in its annual report that gold exchange drove sales last fiscal, while Kalyan Jewellers said the share of recycled gold increased to 46% which it wants to expand further. Kalyan Jewellers further said that exchanging old gold for new jewellery accounted for nearly one-third of the industry’s revenue, providing a buffer during economic downturn and when consumers cut back on discretionary purchases. At DP Abhushan, which launched its advance purchase scheme in April, old gold exchange now contributes about 25-30% of its business. Vikas Kataria, promoter of DP Global, which owns the listed jewellery retailer, said gold exchange had “definitely picked up significantly”, helped in part by Prime Minister Narendra Modi’s comments on gold holdings. He said the trend is likely to continue this fiscal until prices stabilise.Advance purchase deposits also provide jewellers with a source of working capital. Madurai’s Thangamayil Jewellery said in its latest annual report that it balanced its funding structure through internal accruals, customer advances and calibrated borrowings rather than relying excessively on debt.
