PM Modi’s Call to Avoid Gold Purchases Sparks Concerns Over Millions of Indian Jobs

Modi Urges Indians to Reduce Gold Purchases Amid Global Crisis

Indian Prime Minister Narendra Modi has called on citizens to avoid purchasing gold for one year as part of a broader national effort to reduce economic pressure caused by rising geopolitical tensions and global energy disruptions.

The recommendation came during Modi’s seven-point appeal encouraging Indians to:

• Reduce non-essential imports
• Cut fuel consumption
• Avoid foreign travel
• Support local products
• Conserve foreign exchange reserves

The appeal follows economic concerns linked to the ongoing Middle East conflict and rising global commodity prices.

Jewellery Industry Warns of Massive Employment Impact

India’s jewellery industry responded with concern, warning that reduced gold demand could severely impact employment across the sector.

Industry representatives estimate that:

• More than 10 million livelihoods depend on the jewellery industry
• India imports approximately 90% of its gold
• Gold imports reached nearly $72 billion last financial year
• Gold accounts for about 10% of India’s total import bill

All India Gems and Jewellery Domestic Council officials argued that discouraging gold purchases could create serious consequences for workers, retailers, artisans, and manufacturers dependent on gold-related businesses.

India’s Gold Demand Remains Deeply Cultural

Analysts say reducing gold demand may prove difficult because gold buying in India is closely connected to:

• Weddings
• Festivals
• Family savings
• Cultural traditions
• Long-term investments

India remains the world’s second-largest gold consumer, with households estimated to collectively hold around 50,000 tonnes of gold.

Experts noted that many Indians continue viewing gold as protection against:

• Inflation
• Currency weakness
• Economic instability

Government Concern Focused on Foreign Exchange Pressure

Economists believe Modi’s appeal is largely aimed at protecting India’s foreign exchange reserves amid rising global uncertainty.

India currently imports:

• More than 85% of its crude oil
• Over 90% of consumed gold

Rising oil prices and gold imports place additional pressure on:

• Foreign currency reserves
• The Indian rupee
• Inflation levels
• Current account balances

Analysts say reducing gold imports could help stabilize external economic pressures if demand declines significantly.

Industry Suggests Alternative Solutions

Rather than reducing gold purchases entirely, industry experts proposed strengthening India’s Gold Monetization Scheme (GMS), which encourages households to deposit unused gold into the formal financial system.

Industry leaders argue that:

• Existing domestic gold reserves could reduce future imports
• More efficient gold recycling would ease pressure on reserves
• Transparent policy discussions would help reduce uncertainty
• Sudden behavioral changes could damage businesses and investor confidence

Some economists also called for clearer communication from the government if broader economic restrictions may eventually become necessary.

Debate Reflects Broader Economic Concerns

The discussion around gold imports reflects growing concern about:

• Inflation
• Energy prices
• Foreign reserve management
• Global geopolitical instability
• Consumer spending patterns

Financial experts remain divided over whether public appeals alone can significantly change long-standing consumer habits tied to gold ownership in India.

Key Highlights

• PM Modi urged Indians to avoid buying gold for one year
• Jewellery industry warns over 10 million jobs could be affected
• India imported approximately $72 billion worth of gold last year
• Gold demand remains tied to culture, weddings, and savings
• Government aims to reduce pressure on foreign exchange reserves
• Experts suggest expanding gold monetization instead of restricting purchases