India's appetite for gold is insatiable.
While the country's $34 billion market for gold is changing, thanks to government regulations, the love for yellow metal fails to die down. In fact, the advent of smartphones, e-wallets and some investment programs are bringing new buyers into the business.
Online gold purchases have been growing worldwide for years. But they are a new idea in India, where jewelry and pieces of gold are often kept by individuals or given as gifts, a report by Reuters said.
"In India, the action is really starting now. The digitization of the economy will certainly lead to the digitization of gold," Somasundaram PR, managing director of India operations for the World Gold Council, told Reuters. He believes the digitalization of gold will grow in the coming 12-24 months.
A lot of it has to do with Prime Minister Narendra Modi's commitment to Digital India initiative as his government is exploring ways to digitally empower every citizen.
But the situation is slightly different with gold. In the last few years, Indian households have allocated a larger portion of their savings in physical assets as lower returns from financial assets and high inflation have eroded real returns and led to an increase in gold price.
However, the sentiment has changed considerably over the past year due to softening of inflation and amidst growing interest in the elctronic gold.
India's gold imports in February dropped a quarter from a year earlier to 63 tonnes as higher prices curtailed demand in the world's second-biggest consumer of bullion.
Gold is an essential part of the bride's dowry in India, the world's second-largest consumer of yellow metal, and also a popular gift from family and guests at weddings.
Nitin Misra, senior vice president at digital wallet provider Paytm, told Reuters that "about 40 percent of sales" happen during the "off-season" for buying gold in India.
As of December 2017, about 1.4 million of its customers held some gold balance in their electronic accounts.
Market experts believe gold trading will increase in the coming weeks ahead of Akshaya Tritiya festival on April 18 when buying gold is considered auspicious.
According to the World Gold Council estimates, total Indian gold demand stood at 727 tons in 2017, and is expected to rise to 800 tons in 2018. In China, the country using the most gold, demand was 953.3 tons last year.