Industry Odisha Bureau, Sep 09: Rising India gold prices are reshaping jewellery purchasing patterns. Consumers increasingly exchange old gold instead of paying cash. That shift has weakened advance purchase scheme deposits nationwide. Tanishq, India’s largest jewellery chain, reported a sharp decline. The chain is operated by Titan Company.
Gold prices rose about 20% during FY25. They surged roughly 56% during the following fiscal year. Central-bank buying, geopolitical uncertainty and rupee depreciation all contributed. Those factors pushed prices to record levels domestically.
Advance purchase schemes let customers pay in monthly installments. These schemes have long supported jewellery buying nationwide. They also provide jewellers with customer-funded deposits. Deposits have weakened for two consecutive fiscal years. The trend began weakening as early as FY25. Middle- and lower-income households often relied on these schemes.
Tanishq’s deposits fell 39% year-on-year in FY26. Collections dropped to ₹2,116 crore for the chain. That decline nearly doubled the previous year’s 19% drop. The figures came from Titan’s latest annual report.
Reliance Retail’s deposits fell 25% during the same period. Its collections dropped to ₹250 crore, its annual report showed. Jos Alukkas, with 67 stores in southern India, saw similar declines. Its deposits also fell 25%, compared with 5% earlier. Both companies cited similar reasons for the decline. Reliance’s annual report disclosed both years’ figures directly.
Jewellers reported exchange purchases rising by up to 35%. Higher gold prices encouraged more old-for-new jewellery swaps. This shift let households reduce fresh cash outlays. Exchange growth varied across individual jewellery retailers.
At Joyalukkas, exchange contribution rose sharply last fiscal. It reached 65% of sales, up from about 45%. Company officials linked the change to pricier gold.
Kalyan Jewellers said recycled gold’s share reached 46%. The company aims to expand that share further. Kalyan said old-for-new exchanges drive nearly a third of industry revenue. This buffer helps during weaker discretionary spending periods.
DP Abhushan launched its advance purchase scheme in April. Old gold exchange now contributes about 25-30% of its business. The company’s promoter said the trend picked up significantly.
Jos Alukkas said higher recycling could help lower gold imports. It could also help unlock more household gold nationwide. Increased recycling can also free up household gold reserves.
Advance deposits also give jewellers a working-capital source. Weaker deposits can change how retailers fund operations. Thangamayil Jewellery said it balances accruals, advances and borrowings. It said it avoids relying excessively on debt. This structure reduces dependence on any single funding source.
Higher gold prices are sustaining sales through recycled jewellery. Fresh customer deposits, however, continue to weaken industry-wide. That tension is reshaping jewellers’ funding and sales mix. The pattern may persist until prices stabilise further.
