Industry experts on Monday backed Prime Minister Narendra Modi's appeal to avoid non-essential gold purchases, saying the move could help conserve India's foreign exchange reserves amid rising import pressures. Speaking from Surat, experts stressed that gold must be viewed not merely as a consumption item, but as a key pillar of India's culture, savings tradition, financial security, and women's empowerment.

Why Modi's Appeal Matters for Forex

India Bullion and Jewellers Association (IBJA) Gujarat President Nainesh Pachchigar said the Prime Minister's call could help conserve valuable foreign exchange at a time when the country is facing rising import pressures due to global uncertainties. He noted that India imports around 800 metric tonnes of gold annually, requiring massive outflows in US dollars.

Manoj Kumar Jain, Director and Head of Commodity and Currency Research at Prithvi Finmart, pointed out that India accounts for nearly 25–26% of global gold demand. "All imports are paid for in foreign currency, mainly the US dollar, leading to significant pressure on India's foreign exchange reserves," he said.

The Case for Reviving the Gold Monetisation Scheme

While supporting the appeal, Pachchigar urged the government to revive the old Gold Monetisation Scheme to bring idle household gold back into the market and increase recycling of the precious metal. "Such a move would help maintain steady work for lakhs of small and medium artisans associated with the jewellery sector while supporting the government's broader goal of reducing foreign exchange outflow," he said.

He added that the IBJA would soon submit a proposal to the government suggesting measures through which foreign exchange can be saved without adversely affecting artisans and jewellery businesses. "The jewellery industry is deeply linked with the livelihoods of millions of craftsmen across the country and any effort to reduce gold imports should be balanced in a way that does not hurt the sector's economic ecosystem," Pachchigar added.

Rupee Vulnerability and Macroeconomic Risks

JCBL Group Director and Chartered Accountant Renu Arora said India remains heavily dependent on imports for both gold and crude oil, and large-scale imports put pressure on the rupee, weakening its value against the dollar. "The country's economy becomes vulnerable whenever international crude oil and gold prices rise sharply," she said, adding that reducing unnecessary consumption would help India better withstand global shocks and improve macroeconomic stability.

Jain further noted that rising geopolitical tensions, especially between the US and Iran, have pushed global energy prices higher, increasing India's import burden further. This comes amid a broader period of global economic uncertainty that has already strained emerging-market currencies.

Balancing Conservation with Industry Interests

Experts were unanimous that any policy push to curb gold imports must be carefully calibrated to protect the livelihoods of millions employed in the jewellery and artisan ecosystem. The sector supports lakhs of small and medium craftsmen, and a blunt reduction in gold consumption without compensatory measures — such as recycling incentives or monetisation schemes — could cause economic disruption at the grassroots level.

With the IBJA set to submit formal proposals to the government, the industry's response signals a willingness to collaborate on forex conservation — provided the approach safeguards the sector's long-term viability.