Prime Minister Narendra Modi has renewed his appeal to Indians to avoid buying gold unless necessary, linking personal spending decisions to the country's economic resilience. The appeal came in a video message on September 1, marking his third such appeal this year after asking Indians in May to refrain from buying gold for at least a year to conserve foreign-exchange reserves. Modi emphasized that the strong growth came despite wars, global uncertainty and disrupted supply chains, but argued that India must continue strengthening its self-reliance. "If there's no need, don't buy gold," Modi stated, as reported by X, urging people not to spend money on foreign holidays or destination weddings abroad and to embrace the "mantra of made in India" and "vocal for local" approach, promoting the vision of "Atmanirbhar Bharat" or self-reliant India. The government is reportedly considering cutting import duties on gold and silver after higher levies failed to curb inflows, with reports of potential duty cuts fuelling volatility in domestic gold prices.
As reported by Zee News, Vembu highlighted that India's economy is growing at 7.8% while the government seeks to limit certain consumption patterns. He emphasized that faster economic expansion increases demand for imported energy and advanced technology inputs, stating that "the faster the economy grows, the greater the need for both energy and technology inputs." These imports include precision machines, materials, CPUs, GPUs, and advanced software, which require substantial foreign exchange to procure. The appeal was renewed after India recorded 7.8% GDP growth in the April-June quarter of FY 2026-27, with Modi promoting the mantra "Wed in India" instead of overseas destination weddings. According to Hindustan Times, Modi noted that "the world is drowned in war. There is news of war all around. The world is surrounded by crises. The supply chain is completely disturbed," yet India is progressing at a fast pace. Experts said Modi's comments should be seen against a broader economic backdrop marked by geopolitical uncertainty and volatility in global energy markets.
According to Vembu's social media post cited by Zee News, India's economy "is growing at a good rate but we still have an import dependence" in critical areas. He drew parallels with East Asian economies that combined fast GDP expansion with deliberate foreign-exchange conservation, noting that "catching up in all of these areas takes time, often measured in decades." Ajay Sahai, director general and chief executive of the Federation of Indian Export Organisations (FIEO), said imports of raw materials and intermediate goods were necessary to support manufacturing and exports, but non-essential imports should be restrained. "Gold is mostly unproductive asset in India. Its import is only justified if it is productively used and not as an idle asset," Sahai said, as reported by Hindustan Times. The country must export more to balance its import requirements, requiring sustained focus on competitiveness and technological advancement. Chief Economic Adviser V Anantha Nageswaran has also pointed to the role of India's foreign-exchange cushion in supporting growth, noting that India's strong external position and recent increase in foreign-currency inflows provide a buffer against external shocks.
India's gold imports have risen sharply this year, with latest government data showing gold imports rose 32.4% to $15.17 billion in the first four months of the current financial year, from $11.46 billion in the corresponding period of 2025-26. In rupee terms, gold imports during April-July 2026 stood at more than ₹1,43,880 crore, up about 46.5% from ₹98,239 crore a year earlier. India depends overwhelmingly on imported gold to meet domestic demand, making bullion one of the country's biggest import items after crude oil. India is the world's second-largest bullion buyer and relies almost entirely on overseas supplies to meet demand, with gold playing a vital role in savings, weddings and religious festivals in the country. Gold imports have become more attractive to investors amid geopolitical and economic uncertainty, with bullion gaining almost 10% in August, its biggest monthly increase since January, and spot gold trading around $4,430 an ounce on Tuesday. Higher global prices mean Indian consumers need to spend more rupees on imported bullion, and strong demand at elevated prices can increase the country's import bill further.
The government had earlier taken steps to curb precious metal imports, with customs duty on precious metals, including gold and silver, raised to 15% from 6% on May 13, with the stated aim of reducing imports and conserving foreign exchange for essential imports such as energy and fertilisers amid the protracted war in West Asia. However, gold imports surged more than 32% from a year earlier in the first four months of the financial year, adding pressure on the rupee. India's merchandise exports rose 19.63% year-on-year to $44.24 billion in July, while imports increased 17.52% to $76.22 billion, pushing the merchandise trade deficit to a six-month high of $31.98 billion. The trade deficit widened to almost $32 billion in July, the highest since January, with gold being among India's largest imports and contributing to the country's merchandise trade deficit. The government's focus on reducing gold imports is particularly significant for overall trade balance and currency stability, as highlighted by recent analysis showing that the last five years, gold imports were $257 billion worth while FIIs actually took out $33 billion from Indian markets.
