Modi Warns Indians Against Buying Fresh Gold Amid Record Imports

India's gold imports have surged to a record $71.98 billion in FY26, up more than 24% from FY24 and FY23. This has put pressure on the country's external finances, with the Prime Minister warning Indians against buying fresh gold to ease forex pressure.

The government argues that not all domestic gold demand needs to be met through new imports, suggesting that existing gold holdings can be recycled or sold instead.

Jewellery retailers have introduced programmes to encourage customers to bring idle gold back into circulation. However, the Prime Minister's appeal has triggered selling in jewellery stocks, with major companies like Titan and Kalyan Jewellers falling 1.12% and 4.50%, respectively.

The government is concerned about India's large trade deficit, which can increase dependence on foreign capital and other sources of foreign exchange. Reducing gold imports could help conserve foreign exchange and ease pressure on the rupee.