Narendra Modi Calls on Citizens to Stop Buying Gold for a Year as Jewelry Stocks Plunge Sharply

Indian Prime Minister Narendra Modi has urged citizens to avoid buying gold for at least a year in an effort to ease pressure on the country’s foreign exchange reserves, in a surprising appeal in a nation where the precious metal plays a central role in savings, weddings, and religious festivals.

Speaking on Sunday, Modi said Indians should refrain from purchasing gold jewelry regardless of the occasion over the next year. He also called on citizens to reduce fuel consumption and limit unnecessary overseas travel amid mounting pressure from rising import costs and geopolitical tensions.

Modi noted that India spends billions of dollars annually on gold imports, stressing that reducing non-essential purchases has become necessary to support economic stability and narrow pressure on the rupee and the country’s widening trade deficit.

The unusual appeal highlights the growing impact of the Middle East conflict and soaring energy costs on India’s economy, particularly as the trade deficit expands and the local currency weakens.

India is the world’s second-largest gold importer after China, with the precious metal accounting for one of the country’s biggest import bills after oil. Gold also remains deeply embedded in Indian culture, serving as a traditional store of wealth and an essential part of weddings and religious celebrations.

Despite gold’s cultural and economic importance, Indian markets reacted sharply to Modi’s remarks, with jewelry stocks coming under heavy selling pressure on Monday.

Shares of Titan Company, India’s largest jewelry retailer, fell 6.6% in Mumbai trading, while Senco Gold dropped 10.8% and Kalyan Jewellers India declined 9.5%.

The developments come as Indian banks continue to face difficulties importing gold due to administrative bottlenecks, disruptions that could temporarily help reduce bullion imports and support India’s trade balance in the coming months.