Supporting Prime Minister Narendra Modi’s appeal to avoid non-essential gold purchases in order to save foreign exchange reserves, industry experts on Monday said that gold should not be viewed merely as a consumption item, but also as a key pillar of India’s culture, savings tradition, financial security and women’s empowerment.
India Bullion and Jewellers Association (IBJA) Gujarat President Nainesh Pachchigar said the Prime Minister’s call could help conserve valuable foreign exchange at a time when the country is facing rising import pressures due to global uncertainties.
However, he stressed that the government should also revive the old Gold Monetisation Scheme to bring idle household gold back into the market and increase recycling of the precious metal.
“Such a move would help maintain steady work for lakhs of small and medium artisans associated with the jewellery sector while supporting the government’s broader goal of reducing foreign exchange outflow,” he said.
“The jewellery industry is deeply linked with the livelihoods of millions of craftsmen across the country and any effort to reduce gold imports should be balanced in a way that does not hurt the sector’s economic ecosystem,” Pachchigar added.
He added that the association would soon submit a proposal to the government suggesting measures through which foreign exchange can be saved without adversely affecting artisans and jewellery businesses.
Backing the Prime Minister’s appeal, JCBL Group Director and Chartered Accountant Renu Arora said India remains heavily dependent on imports for both gold and crude oil, and large-scale imports put pressure on the rupee and weaken its value against the dollar.
“The country’s economy becomes vulnerable whenever international crude oil and gold prices rise sharply,” she said adding that reducing unnecessary consumption would help India better withstand global shocks and improve macroeconomic stability.
Meanwhile, Manoj Kumar Jain, Director and Head of Commodity and Currency Research at Prithvi Finmart, said India accounts for nearly 25-26 per cent of global gold demand and imports around 800 metric tonnes of gold annually, requiring massive spending in dollars.
“All imports are paid for in foreign currency, mainly the US dollar, leading to significant pressure on India’s foreign exchange reserves,” he said.
“Rising geopolitical tensions, especially between the US and Iran, have pushed global energy prices to record highs, increasing India’s import burden further,” he added.
