The supply chain disruption and restrictions over movement of non-essential goods in April and May resulted in jewellery demand falling sharply by 74 per cent during the first quarter of FY21.
Recycled gold supply increased 6 per cent during the third quarter of this year, with recycling channels reopening as consumers and retailers emerged from lockdown.
In terms of value, India's gold demand during the second quarter of this year was Rs 26,600 crore, down by 57 per cent compared to Rs 62,420 crore in the corresponding period of 2019.
World's gold demand during the first quarter of 2019 stood at 1070.8 tonne, according to WGC's Q1 Gold Demand Trends report.
Smugglers were offering gold at heavy discount during the third quarter and forced many refiners to scale down operations, the WGC said in a report released on Tuesday.