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Gold jewellery consumption to expand by 12-14% in FY26 in value terms: ICRA
May-30-2025

Credit rating agency ICRA in its latest report has anticipated that domestic gold jewellery consumption by value to continue to exhibit double-digit growth in FY26, with an estimated increase of 12-14%, notwithstanding a projected decline in volumes. This is similar to the price-driven expansion seen in FY25, when the sector registered a 28% rise in value, largely attributable to a 33% surge in gold prices. The current fiscal is expected to follow a similar trajectory, with gold prices currently trending approximately 20% higher than the FY25 average.

ICRA estimates domestic gold jewellery consumption volumes to decline by 9-10% in FY26, following the 7% drop in FY25, even as investment demand will remain resilient. Consumption of bars and coins had risen by 17% and 25%, respectively in FY24 and FY25, reflecting investor preference for safe-haven assets amid global macroeconomic uncertainty and heightened geopolitical and trade tensions. This trend is likely to persist in FY26, with demand for bars and coins likely to grow by around 10%, accounting for 35% of the total gold demand. 

According to the report, in FY25, revenue growth for organised jewellers was driven largely by buoyant realisations, even as most players experienced volume contraction -- except for a few that pursued aggressive store expansion. This pattern is expected to continue in FY26, supported by sustained cultural importance of gold, stable wedding demand and good number of auspicious days. Gold prices are expected to stabilise at current levels, unless there are major global or geopolitical events influencing the price movements, following a sharp rally since Q4 FY23, during which prices grew at a CAGR of 23% through FY25. The asset-light franchisee model continues to be the preferred expansion strategy for large jewellers, enabling faster scale-up with lower capital outlay. Collaborations with local partners provide market-specific insights while supporting capital-efficient growth.


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