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PM Modi's Gold Appeal Could Save Forex Reserves, Experts Say

PM Modi's appeal to reduce gold purchases is supported by experts as a way to save foreign exchange reserves. Industry leaders suggest reviving the Gold Monetisation Scheme to recycle household gold. India's heavy gold imports, around 800 metric tonnes annually, put pressure on the rupee and forex reserves. Experts emphasize balancing this with protecting livelihoods of millions in the jewellery sector.

Key Points: PM Modi Gold Appeal: Saving Forex Reserves

  • PM Modi appeals to reduce non-essential gold purchases
  • Experts say move can save forex reserves amidst global uncertainties
  • IBJA suggests reviving Gold Monetisation Scheme
  • India imports 800 metric tonnes of gold annually, pressuring rupee
2 min read

PM Modi's appeal to reduce gold purchases can help save forex reserves: Experts

Experts back PM Modi's call to reduce gold purchases to save foreign exchange reserves, suggesting revival of Gold Monetisation Scheme for economic stability.

"The country's economy becomes vulnerable whenever international crude oil and gold prices rise sharply. - Renu Arora"

Surat, May 11

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.

- IANS

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Reader Comments

R
Rahul R
Easy for experts to say "reduce gold purchases" but for millions of middle-class families, gold is the only real investment they trust. Stock market is too volatile, real estate is unaffordable, and bank deposits give negative real returns. Gold at least holds value during weddings and emergencies. The government should first fix the broader economy before asking people to change their centuries-old savings habits.
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Kavya N
As a woman, I completely understand the emotional and financial security gold provides. My grandmother's gold bangles saved us during a medical emergency. But I also see the logic in reducing unnecessary imports. Why not promote Indian-made gold jewellery exports instead? We have such skilled craftsmen in Gujarat and Rajasthan who can create beautiful pieces for global markets. That would earn forex rather than just save it! 💡
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Vikram M
Good intention but poorly timed. Gold prices are already at all-time highs, making it unaffordable for most. The real issue is crude oil imports - that's where the big forex drain is. Why not focus on reducing oil dependency through electric vehicles and renewable energy? Gold imports are a drop in the ocean compared to oil. This feels like a token gesture to distract from bigger problems.
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Nisha Z
I agree with reducing gold imports but the government must protect the lakhs of artisans who depend on this industry. My uncle is a goldsmith in Surat and the last few years have been very tough with GST, hallmarking rules and now this appeal. Instead of just asking people not to buy, why not make it easier to recycle old gold? That would keep the artisans busy without new imports. Win-win! 🏅
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Arjun K

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