India's Prime Minister recently appealed to the country's 1.4 billion citizens to work from home, avoid travel, and stop buying gold, as the Iran War drives up energy costs. Modi also called for a return to work-from-home arrangements and online meetings, measures adopted during the COVID-19 pandemic.
Khushboo Ranawat, western regional chair of the Gem & Jewellery Export Promotion Council (GJEPC), acknowledged the government's concerns; however, she cautioned that a prolonged decline in gold demand could affect the entire supply chain.
Ranawat added that gold remains a major import, largely due to demand for weddings and festivals, and is central to conserving foreign exchange reserves and stabilising the rupee.
Modi’s appeal follows economic strain from the Middle East conflict, which has disrupted energy supplies and raised import costs. Analysts noted fiscal pressures as critical in a May report published by The New York Times.
Some industry stakeholders support the policy's intent; however, they caution against a sharp decline in consumption. Others recommend that the government prioritise gold recycling rather than discouraging purchases.
In a letter to the government, the All India Jewellers & Goldsmith Federation (AIJGF) noted that the focus should be on domestic gold mobilisation, recycling, and the better use of idle gold stocks, rather than on reducing demand.
The Times of India highlighted the potential to use large domestic gold holdings held by households, temples, and institutions rather than relying on imports. The government currently relies on voluntary compliance, though the New York Times reported that policymakers may consider stricter measures if needed.
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