India's gold demand to rise over 1,200 tonnes by 2020: WGC
Gold demand in India will continue to grow and is likely to reach 1,200 tonnes or approximately Rs 2.5 trillion by 2020, at current price levels, according to a research by World Gold Council (WGC).business Updated: Apr 02, 2011 14:52 IST
Gold demand in India will continue to grow and is likely to reach 1,200 tonnes or approximately Rs 2.5 trillion by 2020, at current price levels, according to a research by World Gold Council (WGC).
"The rise of India as an economic power will continue to have gold at its heart. India already occupies a unique position in the world gold market and, as private wealth in India surges over the next ten years, so will Indian demand for gold", WGC Managing Director for India and the Middle East Ajay Mitra said in a statement.
Indian gold demand has grown 25 per cent despite 400% price rise of the rupee in the last decade, making the country a key driver of global gold demand, the research said. Gold purchases in India accounted for 32 percent of the global total in 2010.
Further, the council expects an increase by over 30 per cent in real terms.
"India's continued rapid growth which will have significant impact on income and savings, will increase gold purchasing by almost 3 percent per annum over the next decade," the council said in a statement.
It added, "In gold terms, India is a market with significant scale. In 2010, total annual consumer demand reached 963.1 tonnes. As seen in the last decade, Indian demand for gold will be driven by savings and real income levels, not by price".
According to Mitra, in parallel to growth, socio and demographic challenges will need to be addressed given its immense diversity.
"This also applies to the gold market. Nevertheless, gold purchasing will continue, underpinned by India's long-standing and deep cultural affinity for gold; a love affair which transcends generations and makes India unlike any other gold market," he said.
At more than 18,000 tonnes, Indian households hold the largest stock of gold in the world.
'India: Heart of Gold' is the second in a series of WGC research with focus on India.
The first paper, 'India Heart of Gold: Revival' was released in November 2010, and focused on the historical demand of the past 10 years and the revival in 2010.
Together they form a compendium, with the latest research including forecasts from the Centre for Monitoring the Indian Economy (CMIE), as well as contributions from leading academics and industry experts, Dr. D. Pattanaik and Dr. R. Kannan, which have been specially commissioned for the World Gold Council.