Prime Minister Narendra Modi said Indians should avoid buying non-essential gold for one year [2] during a public address in Hyderabad on Sunday [3].
The request highlights the vulnerability of the Indian economy to global shocks. By reducing the demand for gold imports, the government aims to stabilize foreign-exchange reserves during a period of heightened geopolitical instability.
Modi spoke on May 10, 2026 [3], addressing the public in Hyderabad. He said citizens should refrain from purchasing the yellow metal for a duration of one year [2] to help the national economy manage current financial pressures.
The Prime Minister linked the need for this pause to rising global oil prices and the resulting strain on foreign-exchange reserves. This economic pressure is tied to the ongoing conflict involving Iran [1].
India is heavily dependent on energy imports to fuel its growth. The country currently imports more than 88% of its crude oil requirements [1]. When oil prices spike due to Middle East instability, the cost of these imports increases, putting significant pressure on the rupee and the nation's foreign-exchange holdings.
Gold is another major import for India, often purchased for weddings, and as a traditional store of value. Because gold is traded globally in dollars, high demand for the metal increases the outflow of foreign currency. Reducing these imports is seen as a primary lever to ease the current economic strain.
Government officials said the request focuses on non-essential purchases to ensure that the economy remains resilient against external shocks. The move seeks to align domestic consumption habits with the urgent needs of national fiscal stability.
“Prime Minister Narendra Modi asked Indians to avoid buying non-essential gold for one year.”
This appeal represents a strategic attempt to manage India's current account deficit. By targeting gold imports—a significant drain on foreign exchange—the government is attempting to offset the increased costs of crude oil imports caused by the Iran conflict. If the public complies, it could provide a critical buffer for the Reserve Bank of India to maintain currency stability without resorting to more drastic regulatory measures.
