Indian Gold Book:Indian Gold Book - Gold Bars Worldwide

PREFACE
An Introduction to the Indian Gold Market is based on the outcome of four GIR fieldtrips (totalling 14 weeks)
between November 2001 and September 2002, and extensive communication by phone, fax and email with relevant trade
entities.
It also relies on information gathered by GIR over many visits to India since 1990. In 1993, GIR compiled an unpublished
report on the Indian gold market for the World Gold Council. This earlier marketing consultancy project, in particular, has
assisted GIR to view the current market from an historical perspective.
The publication has been compiled according to three objectives:
• Consolidate accessible statistical and other information on the Indian gold market into a single source of reference.
• Focus on the gold bullion and jewellery markets, the nature of consumer demand from the trade perspective, and the
role of the Indian Government.
• Support the promotion of gold in India.
EXTERNAL STATISTICS
The official import and rupee gold price statistics rely largely on Madhusudan Daga, who collates them on behalf of most
international analysts. The estimates of unofficial imports, and the breakdown of industrial gold demand, also rely on
Mr Daga. Imports of gold for re-export as jewellery are derived from statistics provided by The Gem & Jewellery Export
Promotion Council. Where external published statistics are recorded, the source is noted below the table.
GIR STATISTICS AND MARKET INFORMATION
Estimates of gross and net demand for jewellery, coins and bars, other tabulated market statistics and general market
information are necessarily based on anecdotal evidence provided by the trade, a constraint that applies to all analysts both
inside and outside India.
Leading trade entities repeatedly advise that the Indian gold market is so fragmented and complex, and so variable by State,
by rural and urban area, and by retailer even in the same locality, that no one can produce a definitive report. It means,
for example, that statistical estimates of the breakdown of demand and the level of recycling can only be indicative.
Although GIR has tried to represent the broad view of most trade entities visited, the report should be seen
for what it is: a consolidated reference work that others can build upon or modify according to their own
understanding of the market, or as new or revised information becomes available.
It can also be recognised that there is not yet a broad consensus among analysts inside and outside India on several aspects
of the market. For example, findings in the report suggest that the level of recycling and coin fabrication is higher, and the
level of net bar hoarding is lower, than normally reported outside India. In recent years, the nature of Indian gold demand
appears to have changed greatly, influenced not least by a largely static rupee gold price between 1998 and 2001.
This publication, designed and compiled by GIR, is one part of a much broader joint research and consultancy project on
India and its gold market undertaken by Virtual Metals and GIR. I would like to thank the indefatigable Jessica Cross,
CEO of Virtual Metals, and her team, Gary Mead, Tom Butler, Matthew Turner and Sarah Marsden for all their support
throughout the overall project.
Nigel Desebrock
Director
Grendon International Research Pty Ltd (GIR) November 2002
AN INTRODUCTION TO THE INDIAN GOLD MARKET 5