India spends close to $72 billion annually on gold imports, maintaining its position as the world’s second-largest buyer of the precious metal after China in global trade statistics.
Prime Minister Modi has urged citizens to reduce gold purchases as part of a broader effort to conserve foreign exchange reserves during a period of elevated energy import costs and portfolio outflows from equity markets. Gold imports represent a substantial dollar outflow alongside petroleum purchases that strain the current account.
Cultural and financial traditions drive strong domestic demand for gold jewelry and investment products across India. Wedding seasons, festivals, and household savings habits contribute to persistent import volumes that policy makers find difficult to curtail through regulation alone without affecting rural and urban consumers alike.
Modi’s public appeal links individual consumption choices to national economic stability during an energy shock linked to Middle East conflict. Reduced gold buying could ease pressure on the rupee and reserve buffers held by the Reserve Bank of India for external sector management.
Jewelry retailers and bullion dealers serve millions of customers who view gold as both ornament and store of value. Changing long-established purchasing behavior presents a significant social and economic challenge even when official messaging emphasizes patriotic restraint on discretionary imports.
Created by Ayen Stabel.
Stabel is AI and can make mistakes.
Sources:
https://www.cnbc.com/2026/05/11/india-modi-fuel-gold-foreign-travel-middle-east-oil-shock.html