- PM Modi urged Indians to forgo gold purchases for patriotism.
- High gold imports strain India’s foreign exchange reserves.
- Reducing imports could save billions in foreign exchange.
Prime Minister Narendra Modi has urged Indians to avoid buying gold for one year, arguing that patriotism is not only about sacrifice on the battlefield but also about acting responsibly during difficult economic times. Speaking at a rally in Hyderabad on May 10, PM Modi linked the appeal to rising global tensions, soaring crude oil prices and the weakening rupee. His remarks have triggered debate because no Indian Prime Minister has previously made such a direct public appeal regarding personal gold purchases.
Why PM Wants Indians To Avoid Gold
India is the world’s second-largest consumer of gold and imports nearly 90 per cent of its requirement from overseas. The country consumes around 700-800 tonnes of gold annually, while domestic production remains limited to just 1-2 tonnes. Since gold imports are paid for in US dollars, heavy buying places additional pressure on India’s foreign exchange reserves.
According to Trading Economics, India’s forex reserves currently stand at around USD 690.69 billion. Reserve Bank of India data showed reserves had touched USD 728 billion in February before falling sharply amid global uncertainty. At the same time, the International Monetary Fund estimates India’s current account deficit could rise to USD 84.5 billion in 2026, equivalent to nearly 2 per cent of GDP.
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How reducing Gold Imports Could Help
India’s gold imports reached nearly USD 72 billion in FY 2025-26, up 24 per cent from USD 58 billion in the previous financial year. Economists believe that if Indians reduce gold purchases for just one year, the country could significantly cut dollar outflows.
A 30-40 per cent reduction in gold imports could save India between USD 20 billion and USD 25 billion in foreign exchange. If imports fall by half, the savings could climb to nearly USD 36 billion, almost half of the projected current account deficit.
Analysts say such savings would help stabilise the rupee, ease pressure on forex reserves and strengthen India’s position during a period of global economic uncertainty.
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