Indian jewellers could soon earn an extra 1% profit on every piece of old gold they collect.
Under a revised Gold Monetisation Scheme (GMS) proposal submitted to the government by India Bullion and Jewellers Association (IBJA), jewellers will hand over customer gold to refiners and receive approximately 1% direct incentive from the refiners.
IBJA President Prithviraj Kothari told ET Online in an interview on Thursday that jewellers will likely earn a commission of nearly 1% on the total value of the gold they handle.
The Economic Times already reported last month that the Centre is considering a plan to allow jewellers to participate in a revamped version of the GMS to mobilise some of the nearly 30,000 tonnes of the precious metal lying idle with Indian households.
Part of the government’s push to reduce India’s dependence on imported gold, it will be the first time that the participation of jewellers is being sought. Getting them involved will help boost the appeal of the flagging scheme.
Every individual ultimately buys gold through jewellers, said Kothari, adding that if the commission is passed on directly to jewellers, they will actively promote the scheme, acting as brand ambassadors to take it to every household.
Even if a jeweller saves just a small amount over physical transactions, they will promote it, he added.
“In our proposal, we have recommended a 0.75% to 1% incentive, though the final figure rests with the government. Under this proposed 1% payout, jewellers will earn a 1% profit on the total value of gold collected and passed on.”
When asked why banks could not execute the scheme properly, Kothari explained that lenders lacked the necessary manpower, causing earlier iterations to lose momentum.
“People didn’t even know which bank branches accepted gold deposits. In our new framework, banks have zero operational involvement in collection and deposits will remain with banks, but front-end execution lies entirely with jewellers,” he said.
While the scheme is expected to be rolled out soon, Kothari cautioned against potential delays. “The timeline for implementation currently remains uncertain. Given the present political landscape, the process will likely take time as we expect opposition parties to scrutinise and raise objections,” he added.
For jewellers, this scheme will help us mobilise gold directly from customers, boosting footfalls and deepening customer engagement, Suvankar Sen, Managing Director (MD) and CEO of Senco Gold & Diamonds, told ET Online.
“It introduces a valuable new service offering that works entirely in our favour. As jewellers become active participants, the likelihood of the scheme’s success increases significantly.”
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. It’s 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, industry executives said.
ET reported on May 12 that the bullion industry proposed several measures to the government to unlock idle household gold to address the widening balance of payments deficit.
The GMS was launched by the government in 2015 to mobilise the yellow metal held by households and institutions. The minimum deposit was 10 grams, with no upper limit. The scheme has since been truncated.
Since March 26, 2025, only the Short-Term Bank Deposit (STBD) option with a tenure of one to three years remains available, as the medium- and long-term government deposit schemes have been discontinued.
To participate, depositors take their gold to an authorised Collection and Purity Testing Centre (CPTC), where it is tested. With the depositor’s consent, it’s melted and converted into standard 995-purity gold before being credited to a Gold Deposit Account with banks. Depositors earn interest paid in rupees and at maturity they can choose to receive either the equivalent quantity of gold or its rupee value at the prevailing market price.
