Mumbai: India is back to being the number one consumer of gold, knocking China off the top of the podium as the country that consumed the most bullion in the form of gold bars, coins and jewelry, in 2014.

The latest update of the annual study by GFMS of world gold supply and demand found that sliding demand from China – which grabbed the top gold consumer mantle from India in 2011 – is behind the shift.

The report by GFMS analysts at Thomson Reuters showed that Chinese gold demand dropped by over a third to a four-year low of 866 tonnes, while scrap gold supply rose to a new high of 182 tonnes.

Slower economic growth and a crackdown on corruption conspired to cut Chinese jewelry demand to 608 tonnes, a full 33 percent below levels seen in 2013, the report said. Demand for gold bars fell 53 percent to 171 tonnes, a five-year low. An overhang of gold in the Chinese market during the voracious buying that occurred in 2013 was also a factor in keeping purchases subdued, according to GFMS. Some analysts, however, question whether the numbers in the GFMS report tell the whole story.

Mineweb’s Lawrence Williams noted that data from the USGS shows 32 percent of US gold exports in October went to Mainland China rather than through Hong Kong, the normal entrepot for bullion destined for China. Other export flows, especially from Switzerland, are going direct to the mainland. “[O]verall this suggest that Chinese consumption may be considerably higher than the GFMS report appears to suggest,” Williams writes.