Surat, May 11: Industry experts on Monday supported Prime Minister Narendra Modi’s appeal urging citizens to avoid non-essential gold purchases in order to help conserve India’s foreign exchange reserves amid rising global economic uncertainty.
Experts, however, also stressed that gold should not be viewed merely as a luxury commodity, pointing out its deep cultural, financial and social importance in India.
India Bullion and Jewellers Association (IBJA) Gujarat President Nainesh Pachchigar said the Prime Minister’s call could significantly help in reducing pressure on India’s foreign exchange reserves at a time when the country faces rising import burdens due to volatile global conditions.
At the same time, he suggested that the government should consider reviving the earlier Gold Monetisation Scheme to bring idle household gold into the formal economy and increase domestic recycling of gold.
According to Pachchigar, such a move would support the government’s efforts to reduce gold imports while ensuring continuous employment for lakhs of artisans and workers linked to the jewellery industry.
“The jewellery sector is directly connected to the livelihoods of millions of craftsmen and small businesses across India. Measures aimed at reducing imports should be balanced carefully so that the sector’s economic ecosystem is not adversely affected,” he said.
He also stated that the association plans to submit recommendations to the government suggesting methods to reduce foreign exchange outflow without negatively impacting the jewellery trade and artisans.
Supporting the Prime Minister’s appeal, JCBL Group Director and Chartered Accountant Renu Arora said India remains heavily dependent on imports of both gold and crude oil, making the economy vulnerable to fluctuations in international prices and global geopolitical tensions.
She pointed out that large-scale imports increase pressure on the Indian rupee and contribute to weakening its value against the US dollar.
“The Indian economy becomes more vulnerable whenever international crude oil and gold prices rise sharply,” she said.
According to Arora, reducing unnecessary consumption of imported commodities would help India better manage global economic shocks and strengthen macroeconomic stability.
Meanwhile, Manoj Kumar Jain, Director and Head of Commodity and Currency Research at Prithvi Finmart, highlighted India’s position as one of the world’s largest gold consumers.
He stated that India accounts for nearly 25 to 26 per cent of global gold demand and imports around 800 metric tonnes of gold annually.
“These imports require massive payments in foreign currency, mainly US dollars, which puts significant pressure on India’s foreign exchange reserves,” Jain said.
He added that the current geopolitical tensions, particularly involving the United States and Iran, have pushed global energy prices higher and further increased India’s import-related economic burden.
Analysts noted that rising crude oil and gold prices simultaneously can create additional stress on the country’s trade deficit and foreign exchange reserves, making import management increasingly important.
India traditionally remains one of the world’s largest markets for gold due to cultural practices, weddings, festivals and long-standing savings traditions.
Experts observed that while gold continues to play a major role in household financial security and women’s economic empowerment, strategies promoting recycling, monetisation and controlled imports may help reduce pressure on the economy without affecting domestic demand drastically.
The discussion comes amid wider concerns over global economic uncertainty, volatile commodity markets and rising geopolitical tensions affecting international trade and energy prices.
