New Delhi: Leading jewellery industry associations are scheduled to meet officials from the Prime Minister’s Office on May 12 following Prime Minister Narendra Modi’s recent appeal urging citizens to avoid unnecessary gold purchases for the next year.
The development comes after the Prime Minister, while addressing a rally in Hyderabad, called on people to reduce discretionary spending, including buying gold and travelling abroad. He also encouraged citizens to adopt energy saving practices and prioritise domestically produced goods as India navigates growing global economic uncertainty.
The appeal is being viewed against the backdrop of increasing pressure on India’s foreign exchange reserves and a sharp rise in import costs driven by volatile global commodity prices and geopolitical disruptions affecting international supply chains. During the week ending May 1, India’s forex reserves declined by nearly $7.8 billion to around $690.7 billion.
India remains heavily dependent on imports for several key commodities, including crude oil, edible oils, fertilisers and gold. Among these, gold continues to account for a major share of the country’s import expenditure despite having limited direct contribution to industrial production.
India is one of the world’s largest gold consumers, with annual demand estimated at around 700 to 800 tonnes. Domestic production, however, remains extremely low at only about one to two tonnes each year, forcing the country to rely on imports for more than 90 per cent of its total requirement.
The surge in gold imports has added to concerns over foreign currency outflows. In the financial year 2025-26, India’s gold imports reportedly touched a record $72 billion, marking a sharp increase from $58 billion in the previous fiscal year.
Gold now contributes nearly 9 per cent of India’s overall import bill, making it one of the country’s largest imported commodities after crude oil. The government currently levies an effective import tax of around 6 per cent on gold, including customs duty and related charges.
The upcoming meeting between jewellery associations and PMO officials is expected to focus on the industry’s concerns, the economic impact of reduced gold demand and possible policy discussions surrounding imports and domestic consumption.
