India's gold output could rise multifold if hurdles removed: WGC

In what could be a great relief for policymakers in India whose a large amount of foreign exchange reserves go out of the country in importing gold, a report by the World Gold Council said that with current resources could yield an annual output of 20 tonnes of gold per year, generate $50 million in revenues per year and provide employment to upto 4,000 people, should regulatory challenges and taxation policies be made more investment-friendly. India's current goldmine production is mere 1.6 tons per year.

“Despite India being one of the world’s largest consumers of gold, the mining market operates on a small scale and is not an easy one to enter. In 2020 gold mine production was just 1.6 tonnes.”India’s current resources, when compared to production and resource levels in other countries, could reasonably be expected to support annual output of approximately 20 tonnes per year in the longer-term,” the WGC said.

Given that India is one of the world’s largest gold consuming countries, it makes sense for it to develop mining capacity. But change is needed for this to happen: legacy hurdles must be reduced considerably and investment encouraged. There are promising signs with the changes to the MMDR and the introduction of the NMEP and NMP. If this trend continues India’s mine production is expected to increase, the report said.

It said the current state of the gold mining industry in India and the timescales required to undertake the necessary work to develop mines suggest it would likely take up to 10 years for Indian output to reach these levels. However, an expansion of this magnitude is dependent on legacy hurdles being lifted and India being transformed into an attractive destination for gold mining investment over the next few years.

It, however, said the gold mining industry has to compete for investment funding with other gold producing countries. Many of these countries already have a robust and well-established framework to support exploration and mining.

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