Several leading gold jewellery brands such as Kalyan Jewellers, Malabar Gold & Diamonds, Muthoot Exim and MMTC-PAMP are pushing for gold recycling schemes following the recent hike in gold import duty and Prime Minister Narendra Modi’s appeal to defer gold purchases.
Such gold recycling schemes encourage people to exchange their old jewellery, broken or damaged ornaments, outdated designs, gold coins, etc, with new gold items. Jewellery brands claim that such recycling of gold will generate business without putting pressure on gold import, and help India save huge amounts annually in customs duty payments.
But if you have an old 10gm gold jewellery item at your home and wish to recycle it, how much value will these established jewellery brands offer you?
What is gold recycling?
Keyur Shah, CEO, Muthoot Exim, told ET Wealth Online that gold recycling means purchasing old gold from customers, getting it refined, and then resupplying the refined gold back into the industry. According to Shah, even if 1% Indian household gold is recycled, gold import will reduce by 300 tons, which is almost 40% of the total gold imported by India in a year.
What are different gold recycling schemes?
Under its ‘Nation First – Gold4India Initiative’, Kalyan Jewellers has launched the Old Gold Exchange Promotion scheme where customers can exchange their old, unused, broken, or outdated jewellery. Gold exchanged through this programme will be refined, redesigned, and reused within the domestic jewellery ecosystem, claims Kalyan Jewellers.
Malabar Gold & Diamonds, under its Gold Monetisation Scheme, has reduced the minimum deposit quantity from 10 grams to 1 gram, providing flexible redemption options in the form of either gold weight or cash.
Muthoot Exim has long been into gold recycling with its 100 centres across India. Under its Muthoot Gold Point scheme, the company claims to have purchased around 5 tons of old gold since the inception of the scheme, and procured approximately 1 ton (1,000 kgs) in the current financial year alone (FY 25-26).
Tanishq, under its #OldGoldNewIndia campaign, is accepting 9k to 22k gold for recycling. Tanishq claims that it accepts gold from any jeweller and also accepts small or broken jewellery.
How do jewellery brands assess purity and weightage of your old gold?
Ramesh Kalyanaraman, executive director, Kalyan Jewellers, told ET Wealth Online that his company employ a scientifically calibrated, multi-step assessment process to ensure transparency and accuracy of gold. The method includes precise weight verification, Karatmeter testing to check the purity of gold before it is melted to determine its true content objectively.
"This rigorous, scientific approach eliminates ambiguity, ensuring patrons receive a fair valuation based on the actual purity of their gold," says Kalyanaraman.
Shah says Muthoot Exim uses an XRF machine to assess the purity of gold.
“It's like an X-ray machine, where, in just 30 seconds, through X-ray penetration, a customer can know the percentage of gold and other elements such as silver, copper, zinc, nickel, in their gold jewellery,” says Shah.
Shah explains as far as weightage is concerned, it is also done up to three decimal points through a machine.
Samit Guha, managing director & CEO, MMTC-PAMP, which also runs a gold recycling scheme, says, under the scheme, gold is weighed using authenticated precision scales, while purity is evaluated through advanced German XRF technology.
“Unlike traditional touchstone methods that may lead to approximation or value loss, our process ensures precise evaluation without damaging the customer’s gold,” says Guha.
What will be the gold price that you will get for your old jewellery?
Shah says his company tracks daily spot gold prices of India Bullion and Jewellers Association Ltd (IBJA) to calculate the price of a customer’s gold.
Guha explains the final value realised by a customer depends on the purity of gold, the prevailing market prices on the day of evaluation along with the applicable service charges.
Are their charges for gold exchange?
Muthoot Exim takes 3% of the gold price as service charge. There is no GST on gold purchase.
MMTC-PAMP doesn't charge GST on gold buyback transactions, but it takes applicable service charges.
Kalyanaraman reveals there is no GST applicable on the exchange of old gold; the tax is only levied on the value of the new jewellery purchased.
"For a 10-gram gold item, we provide the full value of the gold content with zero deductions on quality. The only adjustment is a minimal, transparent charge for the de-alloying process," explains Kalyanaraman.
