Jewellery associations have confirmed their meeting with Prime Minister's Office officials on Tuesday, May 12, following Prime Minister Narendra Modi's recent appeal urging citizens to temporarily avoid buying gold and cut down on non-essential spending for the next year. According to a CNBC-TV18 report citing sources, this meeting comes after Modi's remarks at a public rally in Hyderabad on Sunday, where he encouraged people to adopt a more cautious spending approach amid economic uncertainty. The Prime Minister asked citizens to reduce avoidable consumption, delay discretionary expenses such as gold purchases and overseas travel, conserve energy and support locally made products.
Modi's comments have triggered sharp reactions from jewellers, particularly in Lucknow, where traders called for a market shutdown. The Lucknow Mahanagar Sarafa Association announced a one-day shutdown on Monday, warning that the remarks could severely hurt artisans and traders during the crucial wedding season. Industry estimates suggest that any slowdown in gold jewellery sales could affect more than one crore people employed in the sector. The jewellery industry is now expected to discuss the broader implications of the appeal with government officials.
Modi's remarks come at a time when India is grappling with mounting pressure on its foreign exchange reserves. According to official data, India's forex reserves declined by $7.794 billion to $690.693 billion during the week ending May 1. India continues to rely heavily on imports for key commodities including crude oil, edible oils, fertilisers and gold, leaving the economy exposed to fluctuations in global prices and geopolitical disruptions that can strain the rupee and widen trade pressures. Gold imports surged to an all-time high of $72 billion in FY26, marking a sharp 24 per cent increase compared to $58 billion recorded in FY25, with the precious metal now accounting for almost 9 per cent of the country's total imports.
The market reaction was swift, with jewellery stocks tumbling amid fears of weaker consumer demand. Shares of Titan Company fell 7 per cent, while Kalyan Jewellers and PNG Jewellers declined 9 per cent and 8 per cent respectively. Senco Gold & Diamonds dropped 11 per cent. The decline came despite most jewellery companies reporting stronger earnings for the March quarter.
According to The Hindu BusinessLine, Dr C Vinod Hayagriv, managing director of C Krishniah Chetty Group, suggested structural reforms to address the import issue more effectively. He proposed a simple structural reform permitting the sale of raw bullion only to GST-registered buyers, which could immediately reduce unnecessary imports, improve transparency and strengthen the organised jewellery ecosystem. The industry emphasizes this is not a short-term measure but a long-term economic safeguard that can benefit the country for years to come.
