New Delhi– The demand for gold in India for the January-March quarter of 2016 was at 116.5 tonnes, down by 39 percent as compared to the corresponding period of the previous year, the World Gold Council said on Thursday.

The overall demand for gold in India was 191.7 tonnes in the first quarter of 2015.

“The jewellers’ strike following the re-introduction of an excise duty, which left even wedding shoppers affected, was one major reason impacting demand,” said a statement by the World Gold Council, citing Managing Director-India Somasundaram PR.

“The sharp increase in the price of gold since the beginning of the year and an expectation of a cut in the customs duty on gold also led consumers to hold back on purchases. The regulation introduced ensuring permanent account number (PAN) details are disclosed for purchases above Rs.2 lakh is also reported to have affected buying,” he added.

Globally, gold demand reached 1,290 tonnes in the first quarter of 2016, a 21 percent increase compared to the same period last year, making it the second largest quarter on record, according to the World Gold Council’s Gold Demand Trends report.

“This increase was driven by huge inflows into exchange-traded funds, fuelled by investor concerns regarding economic fragility and an uncertain financial landscape. Concurrently, global demand for jewellery was down 19 percent, as higher prices and industrial action in India and a softening of the economy in China meant many consumers delayed making purchases,” the report said.

India’s first quarter gold demand value was Rs.29,900 crore, a 36 percent decline from the Rs.46,730 crore recorded in same quarter of 2015.

The total jewellery demand in India for the period was down by 41 percent at 88.4 tonnes as compared to 150.8 tonnes in first quarter in 2015.

The World Gold Council has forecast India’s full year demand is in the range of 850 and 950 tonnes.

However, the World Gold Council is hopeful that the low demand in the first quarter has caused a pent-up demand for gold and coupled with this gold has outperformed all other asset classes since the beginning of the year.

“The promised rural thrust in budget spends, favourable monsoons and the jewellery trade back to work adapting to the new regulations are all favourable factors which will lead to demand returning to normal levels,” Somasundaram added.

In value terms, gold investment demand for the first quarter was Rs. 7,198 crore, a drop of 27.8 percent from Rs.9,969 crore in the corresponding quarter in 2015, the report added.