Mumbai: India needs to take a leaf out of Turkey's book, which has undertaken gold reforms that helped bring out "stocks under the pillow", to reduce imports and curb smuggling, the World Gold Council on Thursday said.
"This is the right time to bring in gold reforms in the country instead of putting on more curbs to curtail demand.
"This will help in bringing out 'stocks under the pillow' and hence increase recycling, which will help in reducing imports and smuggling," WGC, India, Managing Director Somasundaram PR said quoting the 'Turkey: gold in action' report.
Further, he said, the fundamental driver of demand in both India and Turkey is the cultural affinity towards gold and an increasingly affluent population.
Turkey has been successful in bringing out the household gold, by including it into the financial system and strengthening economic growth, the report said.
This has been made possible by the right policy environment and infrastructure, like Central Bank policies that encourage commercial banks to develop gold-backed products, a gold exchange that is linked to the financial systems and a network of London Bullion Market Association (LBMA) accredited refineries, it pointed out.
"It is important to note how Turkey has successfully monetised its limited gold stock of 3,500 tonnes to fund the nation's growth and this presents an immense opportunity for India, which holds around 22,000 tonne of gold valued at over a trillion US dollars in private hands," Somasundaram told PTI.
Based on the Turkey experience, if we can involve financial institutions like banks and non banking financial companies (NBFCs) in gold reforms, 40 percent of our demand can be met through recycling, he added.
The report further revealed that with a well-developed post-production supply chain, Turkey has ambitions to become a regional refining and recycling hub.
Turkey has a number of large-scale refiners which refine dore (pure gold) to internationally accepted LBMA standards as well as processing or recycling gold.
Gold mining industry in Turkey is small, but growing quickly.
The production has increased in almost every year since 2001, growing from 2 tonne to 33.5 tonne in 2013, the report said.
Similarly, India can also look at the mining potential in the country and establish refineries, Somasundaram said.