India could have no need for imported physical gold within the next five years. That is the belief of Rajesh Khosla, Managing Director of MMTC-PAMP.

Khosla is the chairman emeritus of the group and has been pivotal in India’s bullion trade for many years. Speaking at the 6th India International Bullion summit, Khosla said India would stop importing gold within five years.

World Gold Council statistics show that India currently consumes somewhere between 800 and 900 tonnes of gold per year, with 750 tonnes coming from imports and 479 tonnes of that being refined gold (additional gold is doré or recycled).

In his speech, Khosla explained how domestic refineries will expand and produce doré bars (a mix of gold and silver) as well as recycle more scrap metal. India also currently imports gold to re-export it, on the basis of needing LBMA-approval in some cases. At the moment only one Indian refinery is LBMA-approved, but three more are expected to be approved within the next two years.

Khosla managed the partnership of Metals and Minerals Trading Corporation of India (MMTC), best known for their trading of coal, iron ore, and other metals, and PAMP – the Swiss bullion refiners and precious metal specialists. It is unknown to what degree PAMP may cover the LBMA-approved import/exports for India in the event of self-sufficiency, but there are plans to increase mining in India, with estimates of 100-150 tonnes of gold per year. These proposals are still pending Indian government approval.

The development of India’s gold industry would be welcomed, especially with strong traditional demand for the precious metal. Cryptocurrencies haven’t particularly hurt gold demand, while the likes of ETFs and the government’s Sovereign Gold Bond Scheme have only taken a small amount of demand away from physical gold. Greater domestic production and supply should theoretically help bring the gold price down in India, which would be helpful to investors at a time when the Indian Rupee is particularly weak against the US Dollar – the primary currency used for international gold trading.