Indian Citizens Urged to Fast from Gold Purchases for One Year
The Indian government is urging its citizens to stop purchasing gold for an entire year. This is one of the strategies being employed to address the economic impacts of the conflict between the United States and Israel against Iran.
“In the interest of the nation, we must decide that for one year, even if there are events at home, we will not buy gold jewellery,” said Prime Minister Narendra Modi on 10 May, as reported by detikNews. “Patriotism is not only about being prepared to sacrifice lives at the border. In a situation like this, it means living responsibly and fulfilling our duties to the nation in our daily lives,” he added.
Three days later, India also raised gold import duties to 15% from the previous 6%. This policy serves as a bitter pill for the world’s second-largest market for gold in terms of jewellery and investment. In the last fiscal year ending 31 March, the country imported precious metals worth US$72 billion.
In India, gold holds significant cultural importance, as it is frequently given as wedding gifts and passed down through generations. Modi stated that gold purchases deplete foreign exchange reserves significantly, at a time when India is already facing rising oil import costs. The South Asian nation imports more than 85% of its oil requirements.
Oil prices surged by up to 70% at their peak following the onset of the US-Israel-Iran conflict and the effective closure of the Strait of Hormuz, a vital trade route through which approximately 20% of the world’s oil and liquefied natural gas supply passes. Data indicates that the Indian rupee has continued to weaken against the US dollar since May 2025. The spike in energy prices has pressured governments worldwide to implement cost-saving measures.
While many countries are focusing on energy conservation, India appears to be the only nation asking its citizens to reduce spending on precious metals. Gold has become part of broader economic concerns in India because both gold and oil imports are largely paid for in US dollars. The increased demand for dollars could further weaken the Indian rupee, which has depreciated by about 5% against the dollar this year, potentially triggering inflationary pressures.
“For the jewellery sector, this situation is worse than during the COVID-19 pandemic,” said Sanjeev Agarwal, a New Delhi-based jewellery artisan. Another artisan from the capital, Abhishek Agarwal, noted that business owners are “worried” they will struggle to survive if the public stops buying gold.
More than 90% of India’s gold requirements are met through imports, according to Professor Sundaravalli Narayanaswami, head of the India Gold Policy Centre at the Indian Institute of Management Ahmedabad. “Every year, 600 to 700 tonnes of gold are imported and exports are very low, so this gold accumulates in households,” he said.
Indian women are often said to hold approximately 11% of the world’s gold reserves, although this figure is difficult to verify and estimates vary. In India and globally, gold is viewed by many as a safe-haven investment amidst uncertainty, meaning demand can remain high even during economic crises.