India has expanded its gold refining capacity to 1,800 tonnes, yet annual throughput is stuck at just 293 tonnes. Analysts cite regulatory hurdles, volatile import duties, and a lack of international certification as major roadblocks. The sector is now looking toward the India International Bullion Exchange at GIFT City to bridge the gap between domestic infrastructure and global trade needs.
India has spent over a decade building a world-class gold refining infrastructure, yet the industry faces a significant operational crisis. While the country expanded its refining capacity from 300 tonnes in 2013 to approximately 1,800 tonnes by 2021, current data shows that actual annual throughput hovers near 293 tonnes. This massive idle capacity highlights that building infrastructure without addressing supply chain and regulatory barriers has left much of the sector’s potential untapped.
Certification and Supply Chain Gaps
A major hurdle for Indian refiners is the lack of internationally recognized certification. The London Bullion Market Association (LBMA) Good Delivery List is the global standard required for international trade. Currently, only one Indian entity, MMTC-PAMP, holds this accreditation. In comparison, competing hubs like China and Japan have 16 and 11 accredited refiners, respectively. According to recent research from IIM Ahmedabad, many Indian firms struggle to meet stringent international requirements, such as detailed supply-chain traceability and anti-money laundering protocols. Without a sovereign, internationally recognized certification system, Indian refineries find it difficult to compete in the global market.
Impact of Volatile Trade Policies
The industry also faces challenges from erratic trade policies, which impact operational stability. Gold exports saw a sharp decline, with a 73.5% collapse recorded in the 2025–26 fiscal year. Analysts suggest that unpredictable import duty adjustments often disrupt the financial viability of export operations. When duties change frequently, refiners face high pressure on working capital, making it difficult for formal players to compete against informal or smuggled channels. The research suggests that implementing a stable duty-credit mechanism for doré imports could help create a more predictable environment for long-term growth.
The Strategic Role of IIBX
The India International Bullion Exchange (IIBX) at GIFT City is being positioned as the institutional foundation for the sector's future. Currently, the exchange primarily focuses on import facilitation. For India to emerge as a global bullion hub by 2030, the exchange must evolve into a two-way gateway that integrates domestic refining with international demand. This would require connecting banks, domestic refiners, and foreign counterparts to simplify the trade process.
Investors monitoring this sector may track future updates on regulatory cooperation and the adoption of the IIBX. Success for the refining industry will likely depend on whether policymakers can align domestic rules with global standards, streamline sourcing, and reduce duty volatility to ensure that the installed refining capacity is put to productive use.