India’s gold output could rise multifold if hurdles removed: WGC report

The South Asian country is the world’s second-biggest consumer of the metal and fulfils most of its demand through imports.

Topics


India gold demand | World Gold Council | India economy


Reuters  | 
Mumbai 


India’s annual gold production could surge to 20 tonnes from a mere 1.6 tonnes if the government removes bureaucratic hurdles and encourages investment in the sector, the World Gold Council (WGC) said in a report published on Thursday.

The South Asian country is the world’s second-biggest consumer of the metal and fulfils most of its demand through imports. Higher local output could help New Delhi in capping imports. India splurged a record $55.7 billion on gold imports in 2021, buying 1,050 tonnes – the most in a decade, and far more than the 430 tonnes imported in 2020.

“It makes sense for India to develop mining capacity. But change is needed for this to happen, legacy hurdles must be reduced considerably, and investments encouraged,” said Somasundaram PR, regional chief executive officer of WGC’s Indian operations.

In India, securing mining licence is a lengthy process with approvals needed from multiple agencies, which dissuades investment, particularly from multi-national companies, the council said.

Most gold mining areas are in remote locations with poor road and rail linkage, which makes moving materials to and from sites difficult and expensive, it said in the report. Currently, Hutti Gold Mines in the southern state of Karnataka employs more than 4,000 workers and contractors, and accounts for the bulk of production in India.

Gold mining could provide employment to another 3,000-4,000 people, but it needs to attract investment of more than $1 billion to convert resources into reserves and ultimately construct mines, the WGC said.

(Reporting by Rajendra Jadhav; Editing by Subhranshu Sahu)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.


We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor