India consumes more than 1,000 tonnes of gold per annum. It has 32 gold refineries, out of which 27 process dore or unrefined gold with a total refining capacity of 1,467 tonnes.
Indian is known for having one of the oldest and extensive physical gold markets in the world. This is the main reason why it has emerged as a hub for gold refining. It is no surprise that the majority of gold manufacturers are located in the country. The consumption seems to be increasing with each year. The country’s dore imports in 2014 were 120 tonnes, which rose to 180 tonnes in 2015.
Gold Sourcing Standards For Indian Refiners
India boasts of having large refineries. A number of new refineries are also being set up in the country. The factories in Uttarakhand process third of the gold refined in India. So, it becomes important for the country to implement gold sourcing standards for the refiners. The country has the largest hoarders of gold in the world (in the region of 25,000 tonnes). So, there is a need to set separate norms. The Bureau of Indian Standards has given bullion refineries time till May 2018 to register with it.
By setting up these standards, there will be transparency in mineral supply chains. It will also favor the Indian refiners as an implementation of standards based on the guidelines of OECD (organization for economic cooperation and development) will help them mark their presence on a global level. They will be able to meet the expectation of banks, patrons, and customers around the world.
Tyler Gillard, the head of the responsible business conduct unit, investment division, Directorate for financial and enterprise affairs, OECD said “Aligning with the OECD due diligence guidance, the international benchmark will ensure that the Indian responsible mineral sourcing guidelines are recognised in other markets, and meet the expectations of banks, customers, and overseas clients.”
Talking about the flexibility of the OECD guidelines, he said “The OECD guidance is flexible and can be adapted to specific market characteristics in India, as has been done in London, Dubai, and China. This flexibility includes adapting approaches to build on existing checks on imports of bullion and gold dore.”
According to the working committee for the guidelines, the regulatory model would be developed in accordance with the London Bullion Market Association and government supervision. After formulating the guidelines and setting the norms, it is expected that India will be able to export gold. “The government should at some point in time consider allowing export of gold bars refined by Indian refineries after the country implements responsible gold sourcing guidelines,” said Rahul Gupta, director of Bullion Federation.