India’s sharp rise in gold and silver imports reflects a deeper shift in household savings behaviour, with investors increasingly treating precious metals as a financial asset rather than just jewellery, according to Surendra Mehta, Secretary of the India Bullion & Jewellers Association (IBJA).

“People are moving from the other asset class to gold, which is now really called a safe haven asset,” Mehta said, explaining the surge in imports that has also contributed to the widening trade deficit.

He stated that the nature of demand has changed significantly in recent months. “The investment demand, which was about 27–28% in India, is now 45% plus,” he said, adding that rising uncertainty has led investors to reallocate portfolios toward gold and silver. Apart from portfolio shifts, fresh money is also entering the market.

The trend is visible in financial products as well, with increased participation in exchange-traded funds. “A lot of money is coming into the gold ETF and silver ETF,” Mehta said, indicating that investors are increasingly buying gold as an investment rather than a consumption product.

As a result, jewellery consumption is not driving the surge in imports. “The jewellery sales in the organised and unorganised sector is down, but investment demand is high,” he said, underlining the change in demand composition.

Going forward, Mehta expects imports and demand to remain firm over the next few months due to seasonal factors. “We might see a number which is better than last year for February and March,” he said, pointing to the upcoming festival and wedding season.

He also cautioned that global developments could further accelerate buying. “If we hear any geopolitical bad news, then gold prices will go up, and that would lead to a lot of early demand for gold,” Mehta added.

Courtesy :CNBC TV18