Gold imports have hit a decade-high amid strong demand in the country. Jewellery sales have nearly doubled over the past year and India's total demand for the yellow metal rose to 797.3 tonnes in 2021, a 78.6 percent increase from the 446.4 tonnes in 2020, reported the World Gold Council (WGC).

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Most of India’s gold demand is met through imports. The country’s gold imports increased to 925 tonnes, the highest since 2011, an increase of 165 percent since last year. India imported a total of 349.5 tonnes in 2020. Gold is the second biggest commodity in India’s import basket and Switzerland accounts for the most gold imported by India.

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After two years of lacklustre jewellery sales, the fourth quarter saw the demand for gold finally cross beyond pre-pandemic levels on back of a strong vaccination programme, recovering economy and the festive and wedding season.

"India's gold demand recovered by 79 percent to 797.3 tonnes chiefly a result of an exceptional fourth quarter demand of 343 tonnes that surpassed even our most optimistic expectation articulated in the third quarter and turned out to be the best quarter in our recorded data series," WGC Regional CEO, India, Somasundaram P.R. told PTI.

While gold wasn’t considered a lucrative asset during the last two years, especially with skyrocketing returns delivered by assets like equities and cryptocurrencies, its demand does not indicate any slowdown in the near future.

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"The year 2021 revalidated the strength of conventional wisdom about gold and holds several lessons in revival that will shape policy thinking for years to come," Somasundaram added.

He added that starting 2022, the demand will set up a new normal towards 800-850 tonnes. He, however, cautioned that this would be possible only if there were no major economic disruptions because of the pandemic.

Also read: Gold to add glitter in 2022 on pandemic woes, strong dollar; price likely to cross Rs 55,000/10gm

(Edited by : Shoma Bhattacharjee)