Walk into any jewellery showroom, and the assumption most people carry is simple: the gold behind that glass counter came from a mine somewhere, got refined, and landed on display. Nobody really thinks past that. But ask a jeweller or a small manufacturer where their raw material actually comes from week to week, and you'll get a more complicated answer involving banks, interest rates, and a fair amount of stress about timing.
At the same time, if you turn the question around and ask an ordinary household where their gold is, the answer is usually a locker. Untouched and not doing anything. That's also why more people are beginning to ask how to earn from gold instead of simply storing it for years without any financial return.
How the Industry Actually Sources Its Gold Today
Jewellers and manufacturers don't just walk up to a mine or wait for customers to sell them old bangles. There's a whole supply chain behind it, and each route comes with its own baggage.
Sourcing Route | How it works | Key limitation |
Imported bullion | Gold is purchased through RBI- and DGFT-authorised banks or agencies, with prices linked to international markets and paid in US dollars | Increases India's gold import bill and exposes businesses to currency fluctuations. |
Gold Metal Loans (GMLs) | Banks lend gold instead of cash. Manufacturers use the gold to make jewellery, sell the finished products, and repay the loan in rupees | Interest typically ranges from 7–12% per year, and repayment is restricted to 180 days for domestic sales and 270 days for exports. |
Consignment gold | Bullion suppliers provide gold on credit, while the final purchase price is fixed at a later date | Still depends largely on imported gold, and businesses remain exposed to gold price fluctuations before the price is locked in |
Recycled or old gold | Jewellers source gold through exchange programmes, where customers trade in old jewellery to be melted and reused. | Supply is unpredictable because people usually sell gold only when prices are high or they urgently need money |
Here's the thing that doesn't get talked about enough: almost every one of these routes, even the ones that look "domestic" on paper, eventually traces back to imported gold.
A Gold Metal Loan feels like borrowing gold locally, but the bank issuing it is usually sourcing that gold internationally too. So the industry ends up financing its working capital against gold that was imported anyway, paying 7 to 12% a year in interest on top of it, all while racing a 180-day clock before prices move against them.
And this isn't a small, isolated cost. India's gold import bill touched $71.98 billion in FY 2025-26, up 24% from the year before, and gold now accounts for close to 8% of everything the country imports. A meaningful chunk of that isn't jewellery buyers walking into a store; it's the industry itself replenishing raw material it has no other reliable way to get.
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The Household Side of the Problem
This is the part most people already know instinctively. Indian households are sitting on somewhere close to 25,000 tonnes of gold. Add temples and institutions and you're looking at roughly $5.2 trillion, something like 125% of India's GDP, doing precisely nothing in lockers and vaults.
The government tried to fix this with the Gold Monetisation Scheme back in 2015. Over a decade on, it has pulled in barely 32 tonnes. Not because people don't have gold to offer, but because the scheme ran through banks that weren't set up for purity testing at scale, and left out the one party people actually trust with their gold jewellers themselves.
So you end up with an industry importing gold at real cost, and a country full of households holding gold that nobody is using. It's not a shortage. It's two systems that were never connected.
This Is Exactly the Gap Leasing Is Built to Close
Gold leasing isn't investing, that distinction matters. Investing means buying more gold. Leasing means taking gold you already own and putting it to work without giving up ownership of a single gram of it.
For a household, that 10 grams of jewellery sitting in a locker gets handed over to a jeweller or refiner who can actually use it in production.
In return, the owner earns a bit more gold back, calculated against the prevailing gold lease rate. For the business on the other end, this is gold sourced from within the country, from people who already hold it, instead of gold routed through an import channel and financed at 7-12% interest with a ticking repayment clock.
It's not a stretch to say leasing is closer to what the Gold Monetisation Scheme was trying to achieve, except it works through the exact institutions people already trust their gold with, and it doesn't ask anyone to give up ownership to make it happen.
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How myGold's Leasing Model Actually Works
myGold's leasing model is built around this very idea, and it's worth understanding how it works if anyone is looking to make more from the gold they already own, the platform allows you to put it to work while continuing to retain ownership.
You earn up to 5% per annum in extra gold weight on whatever you lease, and it can be tracked transparently through the app, so you're not guessing.
There's no lock-in; you can withdraw your gold whenever you need to without any deductions and get the amount transferred directly to your bank account or get gold delivered in the form of bars and coins to your doorstep.
Every single lease runs on a formal agreement, so that your gold remains safe, while ownership sits with you throughout.
Your gold weight is 100% insured, and purity gets standardised and evaluated before your gold enters the leasing pool at all.
Bottom Line
India's gold problem was never about scarcity. It's about connecting idle household gold with an industry that continues to rely on costly imports. While buying gold will always remain a popular gold investment option, leasing introduces a different way to create value from the gold you already own, without selling it or giving up ownership.
Leasing doesn't try to replace how the industry sources gold overnight, but it does offer a channel that didn't really exist before: gold moving from an idle locker straight into productive use, without a sale, without an import, and without anyone giving up what they own.
FAQs
Why can't the industry just rely on recycled or old gold instead of importing?
Recycled gold depends entirely on when people choose to sell their old jewellery, which usually happens around price spikes or personal cash needs — not on any predictable schedule manufacturers can plan around.
Isn't a Gold Metal Loan already a domestic sourcing option for jewellers?
Not really. The gold behind most GML facilities is typically sourced internationally by the lending bank itself, so the loan reduces cash outlay but doesn't reduce the country's reliance on imports.
What is the gold lease rate in India?
It's the return, usually paid out as extra gold weight rather than cash, that someone earns for leasing out gold instead of leaving it idle.
Who can lease their gold in India?
Pretty much anyone with idle jewellery or coins can lease it, as long as it goes through proper purity checks and documentation. Check whether the platform is properly verified and secured before you start leasing
