PM Modi 'no gold' call hits Chandni Chowk

Prime Minister Narendra Modi’s appeal on May 10 that Indians should avoid buying gold for a year has landed hardest in the country’s traditional jewellery markets, including Delhi’s Chandni Chowk, because it targets a purchase tied to weddings, festivals and household savings. Modi made the call at a public event in Hyderabad, where he also urged people to cut fuel use and unnecessary foreign travel as India tries to conserve foreign exchange amid higher energy costs and external pressure on the rupee. Business Today reported on May 13 that traders in Chandni Chowk and Mumbai’s Zaveri Bazaar were rattled by the remarks, describing panic in wholesale and retail jewellery hubs that depend on foot traffic tied to ceremonies and seasonal buying. The outlet said the comments had sent shockwaves through India’s gems and jewellery trade and framed the issue as a direct hit to one of the sector’s busiest physical marketplaces. (bloomberg.com) The single number behind the government’s concern is India’s gold import bill. Commerce Ministry data showed gold imports rose 24% to a record $71.98 billion in fiscal 2025-26, from $58 billion a year earlier, even though import volumes fell 4.76% to 721.03 tonnes, indicating that higher prices drove much of the increase in value. Gold is one of India’s largest import items, and the import bill matters because it must be paid in foreign currency. (businesstoday.in) Reuters reported on May 11 that Modi’s remarks came as the Iran war pushed oil prices higher, increasing pressure on India’s balance of payments and the rupee. India is the world’s third-largest oil importer and consumer, Reuters said, and more than 90% of its crude oil needs are met through imports. In that setting, gold purchases became part of a broader austerity message from Modi rather than a standalone comment about jewellery demand. (bfsi.economictimes.indiatimes.com) The market reaction was immediate. Shares of Indian jewellery retailers fell on May 11 after Modi’s comments, with reports citing declines in Titan, Kalyan Jewellers and Senco Gold as investors weighed the risk of weaker consumer demand and possible import curbs. Reuters said the remarks also fuelled concern that higher tariffs on gold could follow, though no such move had been announced at that point. (uk.finance.yahoo.com) The industry exposure is large. Business Today described India’s gems and jewellery industry as an $80 billion business, while other industry-linked material put the broader market closer to $85 billion and said the sector employs roughly 5 million people. Those figures help explain why a political appeal, even without an immediate legal restriction, could unsettle merchants in old-city trading districts where margins depend on wedding orders, custom work and inventory turnover. (uk.finance.yahoo.com) Trade groups have already moved to respond. Times Now and Moneycontrol reported that jewellery bodies planned to seek meetings with the Prime Minister’s Office or government officials after Modi’s remarks, arguing that a prolonged pause in buying would hurt jobs and small businesses. As of May 14, the public reporting points to those proposed meetings as the next concrete step for the sector, while Chandni Chowk and other bullion markets watch for any formal policy move on imports or duties. (businesstoday.in) (timesnownews.com)