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As of May 2026, Prime Minister Narendra Modi has made a public appeal for citizens to refrain from buying gold for one year and to postpone foreign trips, citing the need to protect India’s foreign exchange reserves and strengthen the economy amid rising global volatility. This seven-point advisory urges patriotic duty to manage the economic impact of global conflict on import costs
Key Aspects of the 2026 Advisory:
No Gold Purchases: A request to avoid buying gold (including for weddings) for one year to reduce the import bill.No Foreign Travel: An appeal to postpone foreign trips and travel.Energy & Consumption: Suggestions to use petrol/diesel with restraint and reduce foreign-branded products, encouraging "Swadeshi" (locally made) alternatives.Work from Home: Promotion of work-from-home (WFH) to reduce fuel consumption.
Contextual Reasons:
Foreign Exchange Saving: The primary goal is to minimize the outflow of dollars used to buy imported gold and fuel, particularly as prices surge.Global Crisis Handling: This is a voluntary appeal presented as a "national duty" to support the economy during worldwide economic instability.
Here is a breakdown of what would happen if India did not buy gold for a year, and which countries would take the biggest hit.
India is one of the world's second-largest consumers of gold, with hundreds of tonnes bought every year. If gold purchases were to fall significantly or stop altogether for a year, the impact would go far beyond the jewellery market. It could ripple through the broader economy, foreign exchange reserves, the value of the rupee, and the trade of several countries.
How Much Gold Does India Consume?
In India, gold is not just jewellery but tradition, investment, and savings all rolled into one. It plays a central role in weddings, festivals, and conventional financial planning. The country consumes approximately 700 to 800 tonnes of gold every year. More than 90 per cent of this demand is met through imports. This is why India spends billions of dollars annually on gold imports alone.
What Would Happen If Gold Purchases Fell for a Year?
If people cut back on non-essential gold purchases, or if buying saw a sharp decline over a year, the most immediate impact would be on India's import bill. According to experts, a 50 per cent reduction in gold imports could save the country up to $30 billion in foreign exchange. Fewer dollars flowing out would ease pressure on the current account deficit and provide some relief to the rupee.
However, the rupee's movement is not determined by gold imports alone. Crude oil prices, the dollar index, foreign investment flows, and global tensions all play an equally important role.
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