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Gold Control Act legacy highlights India jewellery trade’s long shadow of regulation
Our read
India is unlikely to revive Gold Control-style ownership restrictions; the more probable legacy is a tighter, more formal jewellery market where compliance strengthens national chains and intermittent import controls sustain demand for recycled and unofficial gold.
For operators
India’s Gold Control Act legacy underscores how abrupt jewellery restrictions can disrupt supply, push trade underground and alter consumer gold-buying behavior for years.
Watch
Changes in gold import duty, GST treatment, import quotas or nominated-agency rules.
The report,
A retrospective examines India’s 1968 Gold Control Act, which restricted bullion and 14K jewellery, disrupted goldsmiths and fuelled smuggling before its 1990 repeal. It also traces the 1991 RBI gold pledge and current growth in India’s central-bank gold reserves.
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Reported figures
From the report. Source details below
| 1990 repeal after | 22 years |
|---|---|
| 46.91 tonnes of gold pledged in | 1991 |
| Gold share of reserves: | 13.92% in September 2025, 16.70% in March 2026, 16.85% in May 2026 |
| RBI Banking Department gold asset value rose more than 63% in | 2025-26 |
Also in the report
- 22-karat/24-karat customary purity
- 100g jeweller/artisan holding limit
- 40% to 80% gold price premium over London bullion
- 880.52 tonnes RBI gold holdings
Why it matters to operators
Jewellery buyers and partners should diligence regulatory resilience, sourcing compliance and exposure to informal gold flows when evaluating India-focused opportunities.
What to watch next
- A widening current-account deficit, sharp rupee depreciation or sustained surge in gold imports.
- New RBI or government initiatives on gold monetisation, sovereign gold bonds, gold loans or domestic bullion exchange liquidity.
- Expansion of mandatory hallmarking, PAN/KYC thresholds, AML scrutiny and jeweller reporting requirements.
- Growth in the organised jewellery sector's share, recycled-gold volumes and enforcement actions against smuggling.
Likely next moves
Our read of what comes next — analysis, not reported by the source.
- Organised jewellers should deepen hallmarking, source-traceability and recycled-gold capabilities to convert regulatory compliance into market-share gains.
- Retailers should hedge exposure to duty changes through flexible inventory turns, gold leasing, supplier diversification and transparent metal-price pass-through policies.
- Banks, fintechs and jewellers may partner on gold-loan, exchange and deposit products that formalise household bullion without requiring physical sales.
- Industry bodies are likely to lobby for stable import-duty policy and oppose measures that widen the duty gap with unofficial supply channels.
The counter-case
The case against this reading — not reported by the source.
The retrospective may overstate the present-day relevance of the Gold (Control) Act. A law repealed in 1990 operated in a very different economy, before liberalisation, GST, formal hallmarking infrastructure, digital compliance and today’s organised retail jewellery chains. RBI reserve accumulation is a macroeconomic portfolio decision and does not necessarily imply a renewed policy risk for jewellers or household gold holders.
The source
Published
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