Hyderabad: Even as independent India’s first private gold mine kicked off in Andhra Pradesh on Wednesday, bullion industry experts point out that India urgently needs to ease its mining norms to reduce the country’s overwhelming dependence on gold imports. The Jonnagiri mining operation will make a small impact, but the bottlenecks need to go.The project’s contribution may be akin to a drop in the ocean when viewed against India’s vast appetite for gold, which ranges from around 600 tonnes to 800 tonnes per annum, but its timing makes it significant.Soaring global gold prices and a sharp depreciation of the rupee have pushed up India’s import bill, forcing policymakers to look more seriously at domestic production, recycling and gold monetisation. Prime Minister Narendra Modi had also appealed to citizens at a public rally in Hyderabad in May to help reduce the country’s reliance on gold imports by deferring gold purchases for a year.Sachin Jain, Regional CEO India at the World Gold Council, said domestic gold mining has strong potential and could meet 10-20% of India’s current gold consumption over the next five to six years if the right conditions are created.“The govt has issued 14 composite licences. Not every licence has gone into production. There are issues where the central government issues a licence but state-level approvals get stalled due to environmental and other concerns. But a lot of work is going on. We are also working on the mining side with the government,” Jain said.India is the world’s second-largest gold consumer after China and depends overwhelmingly on imports to meet demand. Switzerland is currently India’s largest source of gold imports, followed by the UAE and South Africa.Gold imports accounted for more than 9% of India’s total import bill in 2025-26, rising over 24% to a record $71.98 billion from $58 billion in 2024-25, mainly because of higher international prices.The increase came despite a 4.76% decline in import volumes to 721.03 tonnes in FY26 from 757.09 tonnes in FY25.Against this backdrop, the Jonnagiri mine is expected to produce about 400 kg of gold in its first year of commercial operations, equivalent to nearly 20% of India’s current domestic gold production. At present, state-run Hutti Gold Mines Co Ltd in Karnataka’s Raichur district is the country’s only gold producer, with annual output of around 1.8 tonnes.Geomysore, which kickstarted the Jonnagiri mine, plans to scale up production at Jonnagiri to nearly two tonnes over the next three years after completing the second phase of the project. If achieved, the mine could account for about half of India’s domestic gold output.Jain said domestic mining, recycling and the mobilisation of household gold through gold monetisation schemes could together strengthen local availability of the precious metal if regulatory bottlenecks are addressed.Calling Jonnagiri a “good beginning”, Surendra Mehta, national secretary of the India Bullion and Jewellers Association, said faster reforms are needed to attract serious investment into gold mining.“If the government eases mining regulations quickly, it will be good for the country. Today people do not take interest in mining because clearances can take 5-10 years,” he said. Even if India produces 5% of its total gold requirement domestically, it would help reduce the import bill, he added.Avinash Gupta, vice-chairman of the All India Gem & Jewellery Domestic Council, said the Jonnagiri mine would not materially change India’s supply situation immediately, but it could encourage more exploration.“India is majorly import dependent. Even a minuscule quantity compared to the total consumption will help save precious foreign exchange that is spent on gold imports,” he said.
