Gold imports decline for third month in a row
Gold imports into India stood at roughly USD 12 billion in May 2026, marking the third consecutive month of decline, according to a graph presented by the Reserve Bank of India (RBI) in its latest Financial Stability Report (FSR). The sustained drop is attributed to Prime Minister Narendra Modi's appeal to citizens to reduce gold purchases to help curb the country's current account deficit.
Impact of PM Modi's appeal on gold demand
The Prime Minister had urged the public to limit gold buying, especially during the wedding season, to support the nation's economic stability. The appeal appears to have resonated with consumers, as gold imports have fallen steadily from over USD 15 billion in February 2026 to USD 12 billion in May. The RBI's FSR highlighted that the reduction in gold imports has contributed to an improvement in India's trade balance.
Details from the Financial Stability Report
The central bank's report noted that the decline in gold imports was broad-based, with both jewelry and investment demand easing. The graph in the FSR showed a clear downward trend from March to May. While the exact percentage drop was not specified, the sequential decline from April's estimated USD 13.5 billion to May's USD 12 billion represents a reduction of about 11% month-on-month.
Broader economic implications
Analysts believe that if the trend continues, it could help narrow the current account deficit and reduce pressure on the rupee. However, some experts caution that sustained low imports may affect the domestic gold industry, including jewelers and small traders. The government has not imposed any formal restrictions but has relied on moral suasion through the Prime Minister's appeal.
Market reactions and outlook
Gold prices in the domestic market have remained relatively stable, with a slight softening in demand. The RBI's report did not provide a forecast, but market participants expect imports to remain subdued in the coming months if the appeal continues to influence consumer behavior. The next FSR is likely to provide more data on the trend.
