Recycling even 1% of household gold can cut imports by around 30%: Keyur Shah of Muthoot Pappachan Group

Keyur Shah has been with the Muthoot Pappachan Group for more than 12 years now. The CEO of the group’s precious metals business started the gold recycling vertical from scratch 10 years ago. He believes that structured and transparent gold recycling is not only an economic necessity for India but also a very powerful step toward sustainability. From saving energy and reducing imports to transforming consumer trust, his company is pioneering this much needed change in how India views its vast gold reserves.

The gold recycling vertical, which has 55 branches currently, aims to double to over 100 by next year, Shah tells Fortune India in an interview. He says, gold is one of the most trusted asset classes, especially because 85% of the population lacks access to equity markets, mutual funds, or even insurance. 

Edited excerpts:

1. Why is gold recycling important, and what role does it play in the overall economy?

Gold recycling is crucial for India, especially from an economic and environmental perspective. Over 99% of the gold consumed in India is imported, as we lack large-scale gold mines. Currently, the only functioning mine is the Hutti Gold Mine in Karnataka, which produces just 3–4 tonnes annually.

India’s annual gold consumption ranges between 800 to 1,000 tonnes. The heavy reliance on imports contributes significantly to the current account deficit and weakens the rupee. Gold is the third-largest imported item for India.

However, India already possesses a large amount of privately held gold, about 32,000 tonnes, stored in households and temple trusts, according to the World Gold Council. If even 1% of this gold were recycled annually (around 320 tonnes), it could cut imports by around 30%, massively benefitting the Indian economy.

2. What do you mean by gold recycling? 

Gold recycling means purchasing old gold, refining it, and selling it as new. It is not just about reselling the gold; it is about purifying the old gold so that it meets current quality standards. By doing this, we reduce the need for importing new gold. For example, recycling even 1% of household gold.

3. How is your group transforming the industry to support sustainable recycling?

I represent the Muthoot Pappachan Group, specifically the "Blue Muthoot." Within the group, I manage Muthoot Exim Private Limited, which focusses on gold and silver retailing, as well as purchasing old gold for recycling.

We launched a unique initiative in 2015 by setting up standalone retail outlets called Muthoot Gold Points, dedicated solely to buying old gold. Today, we have 55 such outlets in tier-I cities and metros, and we are expanding into tier-II towns.

Our model is built on transparency and scientific assessment. Unlike traditional jewellers who use rough estimation methods, we use XRF (X-ray fluorescence) machines that determine purity in just 30 seconds, without scratching the jewellery. If needed, we melt the gold in front of the customer for a more accurate test.

We are upfront about our 3% margin and provide fair valuation based on live market rates. This approach has earned customer trust, especially among women who typically compare quotes from multiple jewellers before selling. Thanks to our scientific and ethical approach, we have had a conversion success rate of around 99%.

4. Who are your competitors in this market?

At the national level, we don’t have any direct competitors in the gold recycling space. When we started this business, there were none. Now, some regional players have emerged who are replicating our model by focusing solely on buying old gold, but no major national brand has stepped in yet.

5. Why hasn't gold recycling gained significant traction in India so far?

There are several reasons. Most jewellers in India are primarily focused on selling new jewellery, which offers higher margins. They offer to buy old gold only as a service to retain their customers, not as a core business.

But what we do is, we build a completely separate vertical dedicated to gold recycling. We have purchased over 4 tonnes (4,000 kg) of gold from customers so far. However, this is just a fraction of what’s possible. If just 1% of the privately held gold in India were recycled, it would add up to 300+ tonnes annually.

The opportunity is huge. We were the first movers, and while some regional players are now entering the space, there’s ample room for many more. We plan to grow from 55 to over 100 branches by the first quarter of the next financial year.

6. How is your group contributing to the circular economy and reducing its carbon footprint?

The gold recycling business I have significantly contributes to the circular economy. As I have said above, by recycling 4 tonnes of gold so far, we have saved enormous energy and prevented extensive mining and environmental damage.

Sustainability is not just about the environment; it is also about economic benefits for the country. Recycling reduces import dependency and brings idle household gold into the mainstream economy.

The refined gold we buy is used to manufacture coins and jewellery, creating a closed-loop system. While we don't have our backward integration yet, our operations support this circular model.

7. What are your future growth plans? How will they benefit the government and customers?

In the next three years, we expect to triple the amount of gold we recycle. Alongside recycling, we also sell gold coins, jewellery, and digital gold savings products. We are one of the youngest and fastest-growing companies within the Muthoot Pappachan Group.

Gold remains one of India’s most trusted asset classes, especially because 85% of the population lacks access to equity markets, mutual funds or even insurance. Real estate is expensive and illiquid, but gold can be accumulated in small quantities.

Indians have long practised what modern financial advisors now call SIPs (Systematic Investment Plans), which means buying small amounts of gold regularly. It is an excellent hedge against inflation and a culturally embedded form of saving. We aim to modernise and simplify this tradition, offering transparency and convenience while retaining the core habit of gold saving.