Government working on new plans for gold policy revamp

India has always held competition with China to be the world's top consumer of bullion. In order to get advanced in the race, India is now working on new policies that would improve transparency and help expand the $19 billion gold jewelry industry that it has.

The finance and commerce ministries are presently working on these plans, along with industry groups, which should be finalized by the end of this financial year.

These plans include launching a spot bullion exchange and reduction in the present import tax of 10%, while a dedicated bank for the jewelry industry is also under consideration.

Presently, India's gold jewelry industry is muddled and mismanaged, which is why it’s unable to maintain confidence among consumers.

However, buying and gifting gold is deep rooted in India’s culture, which is why a little push in the industry would enhance people’s trust in quality standards.

Consumption of gold in India is projected to rise to between 850 and 950 tons by 2020, from the present estimate of 650 to 750 tons.

"The gold supply chain should become more transparent and efficient, and the tax reform could boost economic growth, which we see as supporting gold demand," World Gold Council told Bloomberg.

Other than the plans mentioned above, the government is also willing to convince people to recycle their jewelry so that imports can be reduced.