India has only 3 working gold mines
(Hutti and Uti in Karnataka and the Hirabuddini mines in Jharkand) and producing about 0.5% of the country's annual gold consumption , India's dependence on imports has increased.
With the domestic demand for gold going up, our exports have remained sluggish. So most of the gold caters to local needs.
The growing local demand for gold in India can be sourced to a variety of factors apart from the fact that gold provides greater liquidity. "The recent fluctuations in the stock market and realty have pushed Indians towards gold investment Because of this, the traditional preference of Indians for storing gold in the form of jewellery is now balancing out with investors buying gold bars and coins."