India’s gold jewellery demand fell 22% in 2025 as prices surged

India’s gold jewellery demand fell 21.8% year on year to 440.7 tonnes in calendar year 2025 (CY25) as sharply higher prices increased the cost of purchases. Jewellery demand remained the largest domestic segment at 61.1% of India’s 721.1-tonne total gold demand, while bars and coins rose to 280.4 tonnes.

Why did India’s gold jewellery demand fall 22% in 2025?

India’s gold jewellery demand fell because a sharp rise in gold prices increased the cost of buying jewellery in CY25. World Gold Council (WGC) data compiled by CareEdge Research show that jewellery volumes declined from 563.4 tonnes in CY24 to 440.7 tonnes in CY25, a 21.8% year-on-year decrease. Total domestic gold demand, including jewellery, bars and coins, declined 10.17% from 802.7 tonnes to 721.1 tonnes in the same period.

The price increase was substantial during CY25. Domestic gold prices rose from Rs 76,403 per 10 grams in December 2024 to Rs 1.25105 lakh per 10 grams in December 2025, while international prices increased from USD 2,663 to USD 4,135 per troy ounce. The source identifies elevated prices as the main factor reducing jewellery consumption because consumers needed to spend more to buy the same gold weight.

The volume decline continued into the first half of calendar year 2026 (H1CY26). Jewellery demand was 141.2 tonnes in H1CY26, compared with 170.4 tonnes in H1CY25, a reduction of 29.2 tonnes. This comparison shows that jewellery buying remained affected by high-price conditions even after a correction in domestic prices during the second quarter of CY26.

What did consumers buy instead of heavier gold jewellery?

India’s gold jewellery demand shifted towards lighter products, exchange purchases and lower-ticket items, while demand for bars and coins increased. Bars and coins rose by 41.0 tonnes, from 239.4 tonnes in CY24 to 280.4 tonnes in CY25, although total domestic gold demand declined. Jewellery accounted for 61.1% of CY25 demand, leaving bars and coins with the remaining 38.9%.

The H1CY26 figures indicate that the shift in allocation persisted. Jewellery demand fell 29.2 tonnes from H1CY25, while bars and coins increased 19.7 tonnes to 112.5 tonnes. Retailer interactions reported by Metals Focus and the WGC also identified increased demand for lightweight daily-wear jewellery, including chains or mangalsutras weighing 5 to 8 grams, which the source says would have been unlikely five years earlier.

Jewellery continued to serve wedding, festival and cultural purchases, but consumers adjusted how they met this demand. Lighter designs reduce gold content per item, exchange purchases reuse the value of existing jewellery, and lower-ticket products reduce the immediate cash outlay. These purchase patterns would remain important to volume demand if elevated prices continue to constrain the weight consumers can buy.

How did the jewellery market grow in value while gold volumes fell?

The retail gems and jewellery market grew in value because higher gold prices increased the rupee value of sales even as gold jewellery tonnage fell. The domestic retail gems and jewellery market was valued at about Rs 7.204 lakh crore in CY25, compared with Rs 6.384 lakh crore in CY24. That value increase occurred alongside the 21.8% decrease in gold jewellery volume, showing the difference between sales value and physical demand measured in tonnes.

Gold’s large market weight makes price movements particularly important to value growth. Gold represented 82% of the domestic jewellery market in CY25, while studded jewellery represented 13% and other jewellery represented 5%. Studded jewellery includes diamonds, coloured gems and gemstones; the other category includes platinum, fashion and silver jewellery.

CareEdge Research and IMARC Group project the retail gems and jewellery market to grow at a compound annual growth rate (CAGR) of 12.2% between CY25 and CY30. The projection is linked to rising gold prices, disposable incomes, urbanisation, branded retail and design-oriented jewellery. Its outcome therefore depends on consumer incomes, wedding and festival demand, and organised retailers retaining customer trust as well as on higher transaction values.

Which segments and regions will shape the next phase of demand?

India’s gold jewellery demand will remain the main determinant of domestic market volumes because gold accounts for 82% of the CY25 domestic jewellery market. Studded jewellery accounted for 13%, while the 5% other category comprised platinum, fashion and silver jewellery. This concentration means that a change in gold buying has a larger effect on overall domestic jewellery demand than an equivalent change in smaller material categories.

South India was the largest regional market, accounting for 40% to 42% of CY25 retail gems and jewellery demand. West India represented 23% to 25%, North India 20% to 22%, and East India 13% to 15%. The source links the regional split to cultural preferences, purchasing power and economic growth, with South Indian households placing particular emphasis on gold jewellery as a cultural purchase and store of value.

Organised retailers are responding to the price environment through certified products, transparent pricing, lightweight designs and expansion into Tier II and Tier III cities. Mandatory hallmarking, a requirement that verifies precious-metal purity, is identified as one mechanism supporting a shift from unorganised to organised retail. Digital selling, virtual try-on tools and online purchase options are additional channels, but their effect on gold jewellery volume still depends on price levels and consumers’ willingness to purchase by weight.

Conclusion

India’s gold jewellery demand fell 21.8% in CY25 because higher gold prices reduced the physical volume consumers bought, while bars and coins gained volume and retail market value increased. The comparison between 440.7 tonnes of jewellery demand and a Rs 7.204 lakh crore retail market shows that higher transaction values can coexist with lower quantities of gold purchased.

The next measure to watch is whether the H1CY26 pattern of lower jewellery volumes and higher bar-and-coin buying continues through the seasonal second half of the year. The source states that the third and fourth quarters usually account for about 60% to 70% of annual gold demand, while domestic gold prices had corrected in the second quarter of CY26 after the earlier rally.