India has emerged as the world’s largest gold jewellery consumer in FY2024-25, surpassing Greater China, even as elevated prices weighed on overall consumption volumes, according to a joint report by ASSOCHAM and ICRA. The report was released at the 16th Gold Economic Forum held in New Delhi.

As per the report, India and Greater China - covering mainland China, Hong Kong, Macau, and Taiwan - have historically remained the dominant markets, together accounting for around 55% of global gold jewellery consumption by volume in FY2025. Global gold jewellery consumption stood at approximately 1,787 tonnes in FY2025, marking a year-on-year decline of about 15%.

At a regional level, India’s gold jewellery consumption moderated from 579 tonnes in FY2024 to 539 tonnes in FY2025, while Greater China saw a sharper decline from 662 tonnes to 448 tonnes during the same period. In H1 FY2026, consumption fell further to 278 tonnes in India and 164 tonnes in Greater China, compared to 369 tonnes and 206 tonnes, respectively, in H1 FY2025.

The decline has been largely driven by a sharp 30% increase in international gold prices in FY2025, which weighed on consumer demand.

The milestone comes amid a structural shift in the global gold market, from consumption-led demand to investment-driven flows, against a backdrop of geopolitical uncertainty and record-high prices.

As per the report, gold prices have rallied sharply since FY24 across both global and domestic markets. In India, prices rose 14% in FY2024, 33% in FY2025, and surged nearly 50% in the first 10 months of FY2026, driven by currency depreciation and strong global cues.

Spot gold hit a record intraday high of $5,595.46 per ounce in late January 2026, while domestic prices in India surged to an all-time peak of ₹1,84,000 per 10 grams (24K) during the same period.

Demand hit by rising prices

The steep rise in prices has significantly impacted consumer demand. Globally, gold consumption - comprising jewellery, bars and coins - grew at a modest 1.4% CAGR over the past five years and contracted 5% in H1 FY2026.

Jewellery demand has been particularly affected, declining 15% in FY2025 and a further 17% in H1 FY2026. India mirrored this trend, with jewellery volumes falling 7% in FY2025 and dropping sharply by around 26% year-on-year in H1 FY2026, as high prices curtailed discretionary spending.

Even as jewellery demand weakened, gold’s appeal as a safe-haven asset strengthened. Investment demand—including bars, coins and exchange-traded funds (ETFs), rose sharply by 74% in FY2025 and 60% in H1 FY2026 globally.

Central bank purchases have also remained robust, supporting gold prices amid global financial uncertainty. As a result, overall global gold demand still recorded a 2% year-on-year increase in H1 FY2026 despite weakness in consumer segments.

India’s rise to the top spot underscores its deep-rooted cultural affinity for gold, particularly during weddings and festivals. This structural demand base enabled the country to overtake China despite declining volumes.

Policy support offered temporary relief. The reduction in import duty from 15% to 6% in July 2024 briefly improved sentiment, although the gains were partially offset by rising international prices.