Can India Unlock 34000 Tonnes Of Idle Gold

TITLE: Can India Unlock 34,000 Tonnes Of Idle Gold? | Govindraj Ethiraj | The Core Report CHANNEL: The Core DATE: 2026-05-27 ---TRANSCRIPT--- Good morning. It’s Wednesday the 27th of May and this is Govvenat broadcasting and streaming weekdays from Mumbai India’s financial capital. Our top stories and themes. India falls behind Taiwan in market capitalization. Coal fired power plants are running dangerously short on coal. Is India better prepared for heat waves this time? Can a native solution to monetize 25,000 tons of gold in homes work? Ferrari shares fall after it launches an electric car. And who buys a watch to see the time? This is a call report with Goind Raj at Raj. Before we start, as Indian investors look beyond a strong home market story, the discussion that we want to bring about is is this the right time to diversify and how should that risk be managed as you look beyond Indian markets into global opportunities. Join us as we continue our navigating market risk series for a special discussion with Radhika Gupta, managing director and CEO of Edelwise Mutual Fund and Navit Muno, managing director and CEO of HDFC Asset Management Company. This is on the 2nd of June. That’s Tuesday. That’s next Tuesday at the Korum in Lower Parel, Mumbai. Seats are limited and you can register in the link below. The West Asia peace talks if so appear to be proceeding with each side evidently justified in its position that you cannot trust the other. The US carried out what it called defensive strikes in southern Iran even as Iran said it fired back and downed a reaper drone and also said it had a legitimate right to respond to any ceasefire violation. The strikes came hours after Iranian negotiators met with Qatari mediators in DHA for talks in coordination with the United States. US and Iran are apparently working towards a memorandum of understanding, but disputes over language concerning Iran’s nuclear program and sanctions have held up a deal according to CNN. And as talks continue, US Secretary of State Marco Rubio said on Tuesday that negotiating a deal with Iran would take a few days. Now, we’ve all heard all of this before, but more importantly, markets appear to be adjusting faster, less to disappointments and more to positive signals, as has generally been the case. Oil prices were of course up. Brentroo futures were about 4% up at about $9960 a barrel. So, still under $100. Indian markets were down, but depends on which markets you were tracking. Midcap stocks were ruling with the nifty midcap 100 index hitting a record high on the national stock exchange in Tuesday’s intraday trade thanks to power and metal. Of course, if there are any stocks that should do well, its power given the rising gap between supply and demand and more on that shortly. In the past month, the nifty midcap 100 index has outperformed the market gained 3.4% as compared to a.1% decline in the nifty 50. And since April, the midcap index has risen almost 18% as against a 7.8% in the nifty50. Again, according to a report in the business standard on Tuesday, the Nifty50 and Sensex were down and the Nifty50 ended 118 points down at 29,913 and the Sensex was down 479 points at 76,9. In the broader markets, the nifty midcap was up.5% and that was of course after that new record high and the smell cap was up.35%. Taiwan has overtaken India in stock market value thanks to a rally in stock prices of Taiwan’s semiconductor manufacturing or TSMC also the world’s largest chipmaker. Taiwan’s market capitalization is now at $4.95 trillion as of Monday according to Bloomberg data while India has dropped to $4.92 trillion. Taiwan stock market is now the fifth largest in the world behind only the United States, mainland China, Japan and Hong Kong. TSMC, that’s one stock accounts for 42% of Taiwan’s index and is up 46% this year. The rupee on Tuesday fell as crude oil prices rose. As we just spoke, it was down.5% to close at 95 rupees 68 pes per dollar. That’s still under 96 rupees after rising for three sessions. Elsewhere in Asia, Malaysia has imposed a 10% import duty on some gold bar shipments according to Bloomberg which quoted traders and said that this would disrupt the bullion trade in the Southeast Asian nation. India of course has already imposed 15% duty on gold and silver or rather raised duties to 15% on both gold and silver. On the geopolitical front, foreign ministers of Australia, India, Japan and the US agreed to jointly build a port in Fiji in the Pacific Islands and signed packs covering critical minerals and energy security as they sought to inject fresh energy into the Quad grouping. According to a Reuters report, this was the third such meeting since September 2024 and included Australia’s Penny Wong, India’s SJ Shanker, Japan’s Toshi Mitsu Motei, and US Secretary of State Marco Rubio, who’s been in India for the last 3 days. The four nation grouping had lost some momentum last year after failing to hold a leader summit after tensions increased or rose between US President Donald Trump and India’s Prime Minister Narendra Modi over Washington’s tariffs and other matters. According to that Reuters report, the government owned Coal India has asked its subsidiaries to ramp up coal supplies to power plants to avoid shortages as power demand hits a record high following intense heat waves. According to a Reuters report, several regions across the country are already facing power cuts, particularly at night when renewable power, mostly solar, is not available. The report says that as many as 21 power plants have critically low coal stocks, only enough to meet less than a week’s demand. According to latest data from the Central Electricity Authority, therefore, Coal India has now directed its subsidiaries to maximize dispatches using all transport modes including rail links that move coal directly from mines to power plants. India’s peak power is now or rather hit a record of 270.8 gawatt or almost 271 gawatt last week. India has roughly 228 gawatt of non-fossil fuel capacity but coal still accounts for 70% of India’s power generation. Coal India and its eight subsidiaries account for about 80% of India’s coal output and it had held about 168 million tons of coal including about 47 million tons at power plants which was sufficient to meet 19 days of consumption. Meanwhile, India’s refiners crude throughput fell about 9% month on month in April to about 5.2 million barrels per day. Provisional data from the government showed on Tuesday. According to Reuters, India is the world’s third biggest oil importer and consumer. On a year-on-year basis, refinary throughput slipped by about 2.2% in April. Consumption though was higher in April compared to March as we had reported earlier. Temperatures are touching 46° C in many parts of India and notably in small factories in industrial clusters. In states like Uttar Pradesh, for instance, machines are now running without pause. At some of these factories, workers pause every hour for water, briefly step into shaded corners, and return to work. Fans and coolers run continuously, and so does the electricity meter. According to a business standard ground report which quoted the owner of a pulp molding unit in Muzafur Nagar saying worker productivity dips during extreme heat to around 80%. Moreover says that report for manufacturers like him extreme heat is no longer just a seasonal inconvenience or a worker welfare concern but increasingly a hidden operating cost through lower worker efficiency, higher cooling expenses and of course rising electricity consumption. The World Bank has estimated that rising heat and humidity could put up to 4.5% of India’s GDP at risk by 2030 through loss of labor hours. The International Labor Organization or ILO according to that business report has also projected that by 2030 more than 2% of total working hours globally could be lost each year because it’s too hot to work. So the question that we are asking is that are we better prepared this time or were we better prepared this time around since we had advanced warning of these heat waves and we’ve also experienced it in recent years and how are businesses and local authorities responding or have been responding to manage the fallout of extreme heat. I reached out to Dr. Vishwas chitle fellow at the council on energy environment and water or CEW and I began by asking him whether our pace of response this time was better than before. So like you know very quickly I would like to reiterate the scale of the problem. In 2025, we published a study on India’s district level risk to extreme heat which talks about nearly 57% of districts in India which post 3/4 of India’s population are facing high to very high risk to extreme heat. So that’s where we are in terms of numbers. We have 23 heatwave prone states in India out of our 36 states and UTS. So that’s where again like the overall stats shows us the reality or the starkness of the reality. Now when it comes to response, I would like to answer it in two ways. One is of course this year is pretty similar to what we saw in 2024. While 2025 was when we had on and off rains and maybe like you know people just forgot about heat waves and there was no talk about it at all. While in 24 if you recall in the month of May we had almost 10 states declaring heat waves at the same time. And this year we are seeing similar situation. Right now also like three plus states have declared heat waves in various parts of the country. So it’s pretty similar to that. It is linked with many other climatic factors. Of course this year being Elino year we are already seeing that monsoon is going to be below normal. Heat is already getting prolonged etc. But in terms of response this year I felt that already starting from January or February many cities had started putting out alerts. IMD had started putting out early warnings based on their seasonal forecast of heat and there was a lot of proactiveness in terms of putting out forecast and making people aware that this year is a little bit harsher compared to earlier years. So that started happening in February itself. In terms of action at city scale at CW we run a program called national urban heat resilience program in which we support nearly 300 cities in India to develop heat action plans and in that mission so far we have reached 245 cities across various states in India. So also what my personal observation is during this year like if we compare with say January onwards there was a lot of proactiveness from the cities as well to either launch the heat action plans or either pick up some sort of implementation case for cooling shelters or for cool roofs etc. So we saw a much better awareness and at least a much better acknowledgement of the issue which is also very important in this case.

Right. Okay. So let me split that question now into two parts. One is how are you seeing this in terms of impact on labor productivity and what has the response been or should be from manufacturing in general and maybe small enterprises who are typically more exposed to let’s say extreme conditions and the second of course is the cities that you talked about where you’re saying that definitely the pace of response was better than maybe 24 correct yeah so in terms of impacts on manufacturing industry or industry as a whole we have been referring to some of the research where it says that in 2023 alone India lost nearly 181 billion potential labor hours due to heat exposure. Which means that either those hours were not suitable for people to work in those conditions because of red alert or because of orange alert or the working conditions were so harsh that people actually had to stop working and then even if there was alert or not alert they were not working there. So these kind of potential labor hours were lost in 2023 alone. This year again like you know we are seeing that many of these kind of statistics are coming along and in terms ofmemes ormemes which are even much more vulnerable to any climate shock. These kind of statistics or these kind of impacts affect their economic viability or economic sustainability quite a bit. So if you just put it in perspective MSMES which are run from household level businesses or even very small scale businesses do not have any sort of cooling facility at all. And that’s where the real challenge lies like okay just by drinking water it’s not going to solve the problem while many of the large scale industries like I can also definitely cite an example of Aditya group or Mahindra group where they have been able to establish cooling shelters within their industrial units within their assets and in some cases also like some of these large groups again Ariela and Mahindra that’s what I am aware of are actually calling for compulsory breaks for shop floor And for people who are working in manufacturing jobs to take some break of 15 minutes, drink electrolyte and then take some cool water and then come back to job. So these kind of shifting hours or staggered working hours is already being implemented in combination with cooling solutions which is what we see in the large scale industry. However, this definitely is missing from the MSME piece as such. Right? And that’s perhaps the task ahead and the implementation or enforcement of it. So what more should we be doing from a policy point of view? I can see the enforcement is clearly a gap because the solutions at least or some of the solutions are already evident to us. What more could we be doing not just this year which we may be saved in a few weeks because of rains but the next time we face similar heat conditions. I think three things are very important here. Again like you know when you talked about response in the question I wanted to say that it’s not going to be only responsecentric preparedness while we need long-term heat mitigation to be embedded into planning like the cities that we are developing the industries that we are putting up even any kind of industrial development area planning that is going on. We should ensure that long-term heat mitigation is accounted for in that planning process. maybe by allocating green spaces or maybe by already identifying areas for establishing cooling shelters and many of these technologies and tools on the ground. Second, we have to support this preparedness or mitigation efforts with financial allocation. Now this year 16 finance commission has recommended recognition of heat under nationally notified disasters which means that the financial allocations which will be given to heat waves etc is likely to get a good boost and we should utilize that finance for mitigationcentric activities on the ground and third one I think so far what I feel is people are still not acknowledging the fact that the summer that they faced 10 years back is no more the same summer that they are experiencing right now especially when we talk about increase in number of warm nights. So I feel there is still a lot of effort needed to bring that scientific evidence to masses and make sure that they understand the importance of it. Otherwise we might be doing great research but if it is not really acknowledged by the masses it will never be seen in terms of changes in the practice. So I think I would like to talk about these three things. Right. Vas thank you so much for joining me. Great. Thanks Goen. Indian households and temples are sitting on over 25,000 tons of gold with some estimates going up to 34,000 tons of gold in times of austerity. The question that obviously comes up is can these reserves be monetized. Remember the prime minister also had put out a call or an appeal to Indians to reduce their purchases of gold. Amul Bansel who runs a generational jewelry store BK Sarav Jewellers in Lucknau in Uttar Pradesh is attempting to build what he calls a complete gold ecosystem. A fully digital transparent platform enabling you to buy, sell, store and transfer and earn interest on gold easily. I reached out to him and I began by first asking him how he was seeing overall gold purchase or sale trends right now before asking him about his initiative to free up gold reserves. Gold has almost risen from 90,000 to 1 lakh 60,000 in the last 6 7 months. It rose from one lakh to almost two lakhs and came back to 1 lakh 50,000 and this has been an incredible journey for people who have invested in gold. Now the problem is that with this shift in the market it brings about a lot of ambiguity in the market and the trust in the market. As of today, gold with PM’s appeal and you know the import duty hikes from 6% to 15%. It is a very uncertain market but given the international position of gold there is certainty by most of the people who work in gold industry that gold is supposed to go up to $6,000 in the coming days. So most of the analysts are looking between $6,000 to $8,000 in the coming days. As even today, even after so much uncertainty, I still feel gold is a very safe haven for people who believe that gold gives them stability in uncertain times. Right. And in the areas that you are present in, I mean, which is mostly in and around UP consumers, you know, times like this, are they buying more or are they selling or are they holding back? I mean, if at all, that’s different from the rest of the country. So, see, after the PM’s appeal, everybody is holding, right? So, it’s very quick to judge is it because of the PM’s appeal or is it because of people actually taking it to heart that they should abstain from buying gold for the next one year? But overall yes impulsive buying of gold has gone out of the window. People who actually need gold may be wedding buys they’re happening right because still India is a gold obsessed nation. We have been buying gold forever for generations after generations. To change it in one go might be a difficult task to ask of Indians. But yes as of today the market is subdued the demand is subdued in terms of volume in weight the volumes have gone down even though because of the change in prices we don’t see so much of losses on the balance sheet but yes they will start taking a toll if this goes on for too long right tell us about your my gold initiative you’re essentially trying to unlock idle gold assets and how has that worked so far or how do you see that going particularly in terms of again consumer response? I’ve been in this industry for the last 30 years and it was during covid time when you I started looking into you know because I was sitting at home and I was trying to read a lot and when I did a very deep survey on bold mobilization scheme which was launched by the government in 2016 and that was when it struck me that you know we are sitting on gold mine everybody has invested in gold some of the gold is in use and most of it is in kept and loggers which is idle in temples. We have almost 5,000 tons of gold which again is lying idle. So I have been trying to develop a platform which is my gold for the last 4 and 1/2 years which we have successfully built now tested proven operational. We have tried to understand every layer in terms of security, transparency, safety right from the flow of when a user gives his gold to the point where it is utilized by the industry and returned back. So we have created an ecosystem an infrastructure which can work for Bharat which can work for every milligram of gold to one two tons of gold and still function flawlessly with securities and insurance built in in every layer. So I know you’re not a bank uh but how would the scheme be different from let’s say what banks and non-bank finance companies offer as loan against gold? We have built this structure on gold weight. The ownership will never be taken away from Goind. If Goind has is suppose giving me 100 g of gold, he receives a contract of bailment for 100 g of gold along with 100% insurance bag cover note which protects his 100 g of gold against any defaults. Right now this 100 g of gold what is the return Govin is looking for is not in terms of money but in terms of gold weight. So we are gifting you returns in terms of gold weight. The whole system is flowing in terms of gold weight. I give this gold again to the jeweler in terms of gold weight. He returns me in gold along with the added gold over the year which is extra bonus to the user. So if today 1 kg of gold was lying in lockers for the last 5 years it was still 1 kgs but today if it is in my gold after 1 year it is 1 kg 35 g after 5 years it is almost 1200 g so your gold is growing not only in value but at the weight of the gold backed by insurance backed by securities and backed by a system which is you know functioning flawlessly right and who is the benefit beneficiary in this. So you’re saying that the dweller onward dwellers who are taking up or picking up this gold I can understand if there was a shortage of gold but I’m assuming there’s no shortage. So how does the economics work then for someone who’s actually picking this up and also then therefore willing to pay that extra gramage value in gram. So very good question again go it’s something that only a finance person can ask me. So look at this from the point of view of a jeweler today. A jeweler has to either buy gold, right? And he has to pay upfront capital of import duty and GST, right? Now, this even if he goes for a bank loan, it sits on his balance sheet as a liability which he’s already bought at some point of time has to be paid. Now, in terms of payment, the ownership is never transferred to the jeweler. He’s just getting that 1 kg of gold to work with for one year, right? So that for one year that gold is with him as a contingent liability not sitting directly on his balance sheet. Now he’s not giving import duty. The mobilization is happening from the gold that is collected within India. It is not being imported. So helps the government reduce CAD. Allows us to mobilize the idle gold gives return to the users to the Indian citizens. Gold till today is treated as a dead asset. It is a asset which people believe will be kept in lockers for years. We are giving them a reason to get that gold out and give it to us so that we can make extra gold for them. Plus for the industry it protects them from import duty GST easy access to gold that has been mobilized within India. Right. So two questions. One is I’m sensing that all of this depends on a very high level of trust. If you’re saying that you’re really giving them a certificate and the backing of an insurance certificate or an insurance certificate which is not the same as money. The second thing is to do with how your response has been in the last couple of years. Could you give us some sense on what kind of volumes you’ve seen and where? So we have been not building for scale to trickle today. We wanted to make sure that it is a working model. First we wanted to proof an operational model with all safeguard and guardrails built in. So today after doing operations in a city like Lacnau organic right we have been able to scale it to a point we have tested it within the gold industry. So that is the kind of demand from the gold industry and if now we are ready to scale at a point where PM’s appeal is also that mobilize the gold lying in India rather than importing it from outside. So out of that 900 tons go in that comes into India every year only 300 to 400 tons were being used for jewelry. Rest of it was all bullion coins that is going straight into lockers. So our appeal is even if we are able to mobilize 1% of the 35,000 tons of gold we are looking at 350 tons of gold our annual need of the jewelry industry is close to 300 400 tons. So we should be good enough if we are able to do that in the next 1 year or two years. Therefore, you’re saying what people are giving you is really bullion or coins and not jewelry and then getting back coins or bullion and or a little more than what they originally gave. Interestingly, we have customers who are coming in with jewelry and they’re saying we don’t use it. It has been lying in lockers for years but because it was lying in lockers for a security please take this and we have collected gold because we melt it and take 24 karat. ABA is a 24 karat ecosystem. Whenever they want, they can ask for 24/7 access of their 24 karat gold, right? So whether they want money into their bank account, they can get that. They want their physical gold handed back to them. We do a doorstep delivery back to their houses. So 24 karat is a system which allows us to maintain all parameters on a transparent scale. So if you have given me 100 g of jewelry, say 22 karat gold, it is actually 91.6% 6% of 24 karat gold that is credited to your cup. So we are getting jewelry also a lot a lot of old jewelry which was not being used people are giving that also right anal this is very interesting and insightful thank you so much for joining me thank you and on Tuesday gold prices fell thanks to fears of elevated inflation after US Iran tensions rose again and pushed up crude prices and obviously thus clouded US interest rate outlook. Spot gold was down to about $4,521 per ounce. According to Reuters, shares of luxury car maker Ferrari fell sharply on Tuesday after the company launched its first fully electric vehicle. The Italian sports car manufacturer unveiled the loose, which translates as light at a venue in Rome, describing the choice of name as one that evokes clarity and direction. According to a CNBC report, the highly anticipated model, according to this report, marks a departure from the aesthetic of a typical Ferrari and comes even as other luxury car manufacturers, notably Porsche and Lamborghini, have scaled back on plans to launch their own EVs due to weak demand. Ferrari’s CEO described the launch of the Loose model as a very, very important day for the company and one that symbolizes the opening of a new chapter. When asked whether the company could satisfy both new customers and its typical clientele, Ferrari CEO Benedto Vignia told CNBC that look when you do a new technology you need always to keep in mind a word that’s called respect and respect of the technology because when you have a new technology you need to make sure that it’s properly represented in the design. So the design must be different. And sticking to luxury and with a twist, watch maker Odmar Piguay CEO Aria Resta said that response to the luxury Swiss time piece makers launch of a pocket watch in collaboration with Swatch has been overwhelming. She told Bloomberg television in an interview on Tuesday that their website received more than 10 times the visitors they get in a year in just one day. The pocket watch, which is the result of a collaboration, which is of course rare, between the mass manufacturer Swatch Group and Odmar Pig, the maker of the exclusive Royal Loque, went on sale on May 16th. Just to put things in perspective, Odmar sold about 50,000 watches last year with a production capacity of an extra 20,000. And that compares to about 4.4 million watches for the swatch brand according to various reports by Morgan Stanley and Lux Consult. So the Royal Pop launch generated so much interest that some Swatch stores across the world had to shut down for crowd safety concerns and the product was only available for purchase in stores. There was a similar frenzy in 2022 when the Moon Swatch had debuted which was a similar collaboration between Omega and Swatch. Rest said that buyers should be patient and that the Royal Pop would remain on sale for several months, echoing a similar message from Swatch after it was forced to close about 20 of its 220 participating stores after mall operators could not handle crowds. Resta framed the collaboration with Swatch as part of a broader push to quote younger and firsttime buyers at a time or rather moment of structural pressure on the industry. Nobody needs a watch to tell the time, she said. We need to preserve this wonderful industry. That was the core report with me Govindraj Ethi. Do stay connected with more of our coverage at the core. 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