The demand for gold in India for the first quarter (January-March) of 2015 was at 191.7 tonnes, up by 15 percent as compared to the corresponding period of 2014, World Gold Council (WGC) said in a report on Thursday.
"India's gold demand during the first quarter of 2015 was up 15 percent compared to the corresponding quarter last year, though it is still below the 5-year average," said Somasundaram P.R., managing director, India, World Gold Council.
He attributed the growth to the muted demand in the same period last year due to crippling gold import policies coupled with weak economic sentiment and trade uncertainty at the time of the general elections.
"In contrast, following the partial removal of the import curbs (with the exception of a duty reduction) and the budget announcements introducing new gold products, the environment for gold has been encouraging in the past few months, resulting in buying behaviour slowly returning to normalcy," he added.
India's first quarter 2015 gold demand value was Rs.46,730.6 crore, a gain of nine percent in comparison with corresponding period a year ago when it was Rs.42,898.6 crore.
Total jewellery demand in India for first quarter of 2015 was up by 22 percent at 150.8 tonnes as compared to 123.5 tonnes in Q1 of 2014.
Somasundaram said there are a number of factors that will shape a positive environment for gold this year. Like an upward revision of GDP growth, the government's approach to bringing gold into the mainstream economy and ensuring that gold becomes a fungible asset akin to any financial asset.
Also the country's natural affinity with gold as a savings asset will support it becoming embedded in the financial sector and finally the modernisation of the jewellery trade, he said.
"Notwithstanding the unseasonal rains in the early part of the calendar year which will impact the rural economy, full year demand expectations are in the range of 900-1,000 tonnes," he added.