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In a high-profile address amid escalating global tensions from the West Asia crisis, Prime Minister Narendra Modi urged Indians to exercise restraint on non-essential spending to protect the country’s foreign exchange reserves. A key part of his appeal: refrain from buying gold jewelry for at least one year, even for weddings, festivals, or other functions. He also called for fuel conservation, work-from-home where possible, and cutting down on foreign travel and lavish overseas weddings.
India, the world’s second-largest gold consumer, imported a record $71.98 billion worth of the yellow metal in FY 2025-26 — a 24% jump driven by high global prices. Combined with surging crude oil imports due to the Iran-related conflict, this has put pressure on the rupee and forex reserves. Modi’s message framed these as patriotic steps for economic resilience.
The reaction from the gold business and broader industrialists has been swift, mixed, and multifaceted — ranging from supportive nods to national interest to sharp concerns over livelihoods, demand slowdown, and market fallout.
Immediate Market Shock: Jewelry Stocks Tumble
The appeal sent shockwaves through Dalal Street. Shares of major jewelry retailers and makers plunged on Monday (May 12):
- Titan Company: Down ~6-8%
- Kalyan Jewellers: Dropped up to 9-10%
- Senco Gold: Fell 6-9%
- Other players like Sky Gold & Diamonds also saw significant declines.
Investors feared weaker consumer demand, especially in discretionary and wedding-related purchases, which form the backbone of India’s gold jewelry market. Concerns also mounted that the government might hike import duties on gold (similar to hikes in 2012-13) to discourage imports and stabilize the rupee.
Gold Business Reactions: Support with Caution
Traders, artisans, and jewelry firms in hubs like Mumbai’s iconic Zaveri Bazaar expressed anxiety. “There are concerns that the government might sharply increase import duty on gold for a year to discourage imports,” said Surendra Mehta, national secretary of the India Bullion and Jewellers Association.
The All India Gem and Jewellery Domestic Council (GJC) chairman Rajesh Rokde acknowledged the patriotic intent: “Whatever the Prime Minister has said is absolutely correct from the perspective of patriotism and national interest.” However, he highlighted the human cost — the sector directly employs over 1 crore people, with millions more in allied industries like insurance, banking, logistics, packaging, and furniture. A prolonged slowdown could trigger unemployment concerns.
Pune jewellers echoed this sentiment. Abhay Gadgil of the Pune Saraf Association noted deep cultural ties: “This bond is not going to change or break.” Some suggested Modi’s remark might target speculative or investment buying rather than traditional jewelry for occasions. Others interpreted it lightly, with one jeweller joking it might mean curbing “biscuits and bullion” excesses.
Industry voices pushed constructive alternatives:
- Strengthen the Gold Monetisation Scheme to mobilize idle household gold (estimated 40,000–50,000 tonnes held by Indians).
- Promote recycling and domestic sourcing to reduce imports without curbing demand.
- Khushboo Ranawat of the Gem & Jewellery Export Promotion Council (GJEPC) warned of ripple effects across the MSME supply chain, from artisans to retailers.
Despite the jitters, many analysts and jewellers believe long-term demand will remain resilient. Cultural factors — weddings, festivals, and gold as a savings instrument — run deep. Jateen Trivedi of LKP Securities noted it’s “unlikely to materially alter India’s long-term appetite for gold,” though discretionary buys could slow temporarily.
Broader Industrialists Weigh In: Focus on Energy Security and Self-Reliance
While the gold sector bore the direct brunt, prominent industrialists responded more broadly to Modi’s austerity call, emphasizing energy security and reducing import dependence.
Sunil Bharti Mittal (Bharti Enterprises) supported shifting away from “this obsession of gold” toward renewables and lower energy costs. Gautam Adani highlighted the need for national supply chain resilience and energy self-reliance amid global shocks. (Team insights)
Their reactions aligned with Modi’s wider message on fuel conservation and import prudence, viewing it as a timely push for Atmanirbhar Bharat (self-reliant India).
What Lies Ahead?
The government has not announced fresh duty hikes yet, and officials indicated no immediate plans for sharp tariff changes. Jewelry associations plan internal discussions and possible outreach to the Centre.
For now, the episode underscores a classic tension in India’s economy: balancing cultural and consumer aspirations with macroeconomic prudence. Gold remains deeply intertwined with savings, rituals, and identity — but in times of global volatility (record oil prices, geopolitical risks), even symbolic restraint is being asked of citizens.
As one Zaveri Bazaar trader put it amid anxious discussions: the appeal has created short-term caution, but India’s love for gold isn’t fading overnight. Whether it leads to meaningful forex savings or just temporary market jitters remains to be seen.
