A recent trip to the jeweller left my grandmother in a sparkling state of wonder. The salesman had told her that they accepted old gold for exchange. Apparently, this was a strange phenomenon for her, as she recalled that jewellers didn’t take back pieces some years ago. Scoffing at her ignorance, I went back home to my daily Instagram scrolling session.
In one of those uncanny ways in which Instagram seems to listen in on conversations, a jewellery advertisement appeared on my hard-built, tailored feed. It was a Joyalukkas commercial featuring Manju Pillai with the bold tagline: “Gold selling is better than gold pledging.”
It was eerily similar to a Tanishq advertisement from May, featuring Sachin Tendulkar. The campaign was titled “A win for you. A win for India” and pushed for exchanging old gold to reduce India’s import dependency. A Kalyan Jewellers campaign from that time period, “Nation First – Gold4India Initiative”, also promoted the same idea.
Which led me back to my grandmother's question: why are jewellers pushing for selling old gold?
A recent media report said jewellers saw a 35 per cent year-on-year increase in purchases through exchange schemes.
Currently, nearly 65 per cent of jewellery sales at Joy Alukkas are from old gold exchanges. 46 per cent of Kalyan Jewellers' revenue in the first quarter of FY27 was from recycled gold.
Around mid-May, Prime Minister Narendra Modi urged citizens to avoid buying new gold in an attempted move to conserve forex reserves. India brought in gold worth $71.98 million in FY 2025-26. This means a large amount of dollars leaves the country every time gold is imported, directly strengthening the dollar while depreciating the rupee.
However, the government’s push against gold imports is only part of the reason why jewellers want old gold.
Stable revenue stream
The government’s appeal to avoid buying gold, along with gold prices surging by 56 per cent in FY26, led consumers to postpone purchases, causing advance-scheme deposits to fall. Major chains like Titan's Tanishq saw a 39 per cent drop in deposit collections. Jos Alukkas reported a 25 per cent fall in deposits. This eroded a key, predictable revenue stream.
In this environment, old gold exchanges offer another way to continue sales, while giving customers a powerful incentive. Instead of paying fresh cash at high prices, they can afford new jewellery by monetising idle pieces.
Import duty hike
Following the PM’s speech, India doubled the effective tax paid for gold imports to 18.4 per cent from the previous 9.2 per cent. To put this into perspective, if a jeweller wished to purchase one gram of gold at a hypothetical rate of $175, it would pay roughly an extra $32 compared with $16 earlier. A weaker currency also raised the rupee cost of every imported gram, making bullion far more expensive.
Importing bullion with high forex risk, at a time when demand is softening, is a capital-intensive procedure for jewellers. Hence, old gold from households became a cheap source of raw material with less exposure to foreign exchange movements and import costs. This also avoided creating large redundant inventories.
Is exchanging or selling old gold worth it?
In the case of exchanges, jewellers first deduct the value of stones and refining, and a small percentage if it's not hallmarked. Hence, even 100 per cent value offers will not give the full price.
The argument is that gold, being an idle asset, may not generate income. Therefore, many jewellers are pushing consumers to sell at record prices, which logically gives you gains.
However, history tells a different story. The price of gold has shot up during every economic downturn. And many see the yellow metal as a safeguard for the future. There is also a school of investors who look at gold not as an asset but as currency. For them, the argument that gold is an idle asset does not stand. Therefore, selling gold or keeping it becomes a personal choice.
My grandmother left the shop with her old gold still in hand. As she says, before you reach the jeweller, ask yourself: What do you want your gold to do?
