Mining & Supply

India is the world's second-largest consumer of gold, yet its domestic mining output is negligible. The country produces less than 2 tonnes of gold annually from its own mines, while importing approximately 800 tonnes each year to meet jewellery fabrication, investment, and industrial demand. This staggering imbalance — domestic production covering barely 0.25% of consumption — makes India almost entirely dependent on international supply, a structural vulnerability that has driven decades of policy intervention around import duties, trade controls, and exchange mechanisms.

Hutti Gold Mines Limited (HGML), operated by the Government of Karnataka, is the only significant active gold mine in India, producing roughly 1.5 tonnes per year from underground operations in Raichur district. The historic Kolar Gold Fields (KGF), once among the deepest mines in the world and a major producer during the British era, ceased commercial operations in 2001 after decades of declining ore grades and rising costs. Sporadic exploration continues at KGF, but commercial revival remains uncertain.

India's geology explains much of this scarcity. Unlike Australia, South Africa, or China — countries with vast gold-bearing geological formations such as the Witwatersrand Basin or the Yilgarn Craton — India's Archaean greenstone belts host relatively small and dispersed gold deposits. The ore grades at most Indian prospects are modest by global standards, making extraction economically challenging without sustained high gold prices or significant technological investment.

The Mines and Minerals (Development and Regulation) Act, amended in 2021, introduced landmark reforms aimed at attracting private and foreign capital into Indian mining. The amendments enabled auction-based allocation of mining leases (replacing the opaque first-come-first-served system), introduced composite licences that combine exploration and mining rights, and extended mining lease terms to 50 years. Crucially, 100% foreign direct investment (FDI) is now permitted in mining under the automatic route, removing the need for government approval and signalling India's intent to compete for global mining investment.

Recent auction activity reflects this momentum. The government auctioned 21 gold blocks across multiple states, and a record 141 mineral blocks were put up for auction in 2025 alone, spanning gold, lithium, copper, and other critical minerals. Among the most-watched prospects are Bhukia-Jagpura in Rajasthan's Banswara district, where Hindustan Copper Limited is conducting exploration on a deposit estimated to hold significant gold resources, and the Jonnagiri Gold Project in Andhra Pradesh, being developed by Deccan Gold Mines in partnership with the Andhra Pradesh Mineral Development Corporation. Both projects are in pre-production stages, but if they advance to commercial extraction, they could meaningfully increase India's domestic gold output over the next decade.