A day after Prime Minister Narendra Modi urged Indians to refrain from buying gold for a year in the national interest, the Global Trade Research Initiative (GTRI) backed the appeal, stating that surging gold imports are straining India’s foreign exchange reserves and widening its trade imbalance. In its report, the think tank said, “GTRI has supported Prime Minister Narendra Modi’s appeal asking Indians to avoid buying gold for a year as rising bullion imports are hurting India’s foreign exchange reserves and trade balance.”
A day earlier, PM Modi urged citizens to postpone non-essential gold purchases, including those related to weddings, amid global economic uncertainty. With India relying on imports for nearly all of its gold needs, rising bullion inflows continue to place a heavy burden on the economy.
Rising Gold Imports and Economic Impact
The think tank highlighted that India’s gold bar imports have jumped sharply from $36.5 billion in 2022 to $58.9 billion in 2025, increasing pressure on the country’s trade balance as India imports almost all the gold it consumes. This surge has significant implications for the nation’s foreign exchange reserves and overall economic stability.
Call for Review of FTA Policies
However, the GTRI also called upon the government to review precious metal concessions under the India-UAE Free Trade Agreement (FTA) to protect the country's forex reserves. “At the same time, GTRI has urged the government to review its FTA policies, especially tariff concessions on precious metals offered to Dubai under the India-UAE trade deal, which it says have significantly contributed to the recent surge in gold imports,” it further suggested.
Union Minister's Remarks on Forex Conservation
Union Minister Ashwini Vaishnaw also reiterated PM Modi’s appeal for citizens to reduce import-related spending and help conserve foreign exchange. He said the call has gained greater urgency as the ongoing Middle East conflict continues to remain unresolved and its impact spreads across the global economy.
Speaking at the CII Annual Business Summit 2026 in New Delhi, Vaishnaw said recent developments indicated that peace in the region was still far away. He stressed that every citizen has a role to play in safeguarding the country’s economic interests by reducing foreign exchange expenditure wherever possible and increasing foreign exchange earnings in parallel.
He further said that conservation of foreign exchange should begin with everyday decisions, including reducing fuel-related spending such as diesel and petrol consumption, and urged individuals, businesses, and industries to act within their capacity. His remarks come amid escalating tensions in the Middle East, with disruptions in the Strait of Hormuz affecting global energy flows as the conflict continues beyond 70 days.
Market Reaction to PM Modi's Appeal
Meanwhile, after PM Modi's announcement, jewellery stocks saw a sharp sell-off, with investors reacting to concerns over a possible hit to demand. Senco Gold slipped 8.69% or 31 points to 333 on the BSE, while Titan fell 6.45% or 291 points to 4,222 as of 11:11 am. Kalyan Jewellers also declined 8.3% to 389, and PC Jeweller was down 3.26% at 9.
This market response reflects the immediate impact of the Prime Minister’s appeal on investor sentiment and the potential slowdown in gold demand. The coming weeks will reveal how consumers and the industry adapt to the call for reduced gold purchases.
