New Delhi [India], May 29 : Domestic gold jewellery consumption in India is projected to expand by a significant 12-14 per cent in value terms in fiscal year 2026, according to a recent report by ICRA. Gold prices surge by 33 per cent in FY25, ICRA says prices will continue to surge in FY26.
"This will be supported by continued gold price appreciation, planned retail expansion, and market share gains from the unorganised segment. A higher number of auspicious days in the fiscal is also expected to lend some support to demand, despite elevated prices and declining volumes," said Jitin Makkar, Senior Vice President and Group Head, ICRA.
The previous fiscal year saw a substantial 28 per cent increase in the value of gold jewellery consumption, largely driven by a 33 per cent surge in gold prices. ICRA anticipates a similar pattern in the current fiscal, with gold prices currently trending approximately 20 per cent higher than the FY2025 average.
With this robust value growth, ICRA forecasts a decline of 9-10 per cent in domestic gold jewellery consumption volumes in FY2026, after a 7 per cent drop in FY2025.
According to the report, "consumption of bars and coins had risen by 17 per cent and 25 per cent, respectively in FY2024 and FY2025, reflecting investor preference for safe-haven assets amid global macroeconomic uncertainty and heightened geopolitical and trade tensions."
ICRA says this trend for demand of bars and coins is likely to grow by around 10 per cent, accounting for 35 per cent of the total gold demand.
The report also indicates that while operating margins for jewellers are expected to improve by approximately 30 basis points to 7.2 per cent in FY2026, net margin expansion may be limited due to higher financing costs.
"Despite a projected 30 bps expansion in operating margins in FY2026, net margin expansion will remain limited within 10 basis points due to higher financing costs stemming from elevated GML rates and increased working capital borrowings driven by high gold prices and planned store additions," Jitin Makkar added.
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