Industry experts have backed Prime Minister Narendra Modi’s plea to limit non-essential gold buying to safeguard foreign exchange reserves. Gold, they emphasize, is not just a commodity but a vital aspect of India’s culture, savings habits, financial stability, and women’s empowerment. The India Bullion and Jewellers Association (IBJA) Gujarat President, Nainesh Pachchigar, highlighted the significance of Modi’s initiative in conserving foreign exchange amidst escalating import pressures due to global uncertainties.
Pachchigar suggested reviving the old Gold Monetisation Scheme to reintroduce idle household gold into the market and enhance gold recycling. He emphasized that such a step would ensure continuous employment for numerous small and medium artisans linked to the jewelry industry, aligning with the government’s objective of curbing foreign exchange outflow. Stressing the interconnectedness of the jewelry sector with the livelihoods of millions of craftsmen nationwide, Pachchigar urged for a balanced approach in reducing gold imports without disrupting the sector’s economic ecosystem.
In line with the Prime Minister’s call, Renu Arora, Director of JCBL Group and a Chartered Accountant, pointed out India’s heavy reliance on gold and crude oil imports, which strain the rupee and its value against the dollar. Arora highlighted that cutting down on unnecessary consumption could bolster India’s resilience against global economic shocks and enhance macroeconomic stability. Additionally, Manoj Kumar Jain, Director and Head of Commodity and Currency Research at Prithvi Finmart, noted that India’s substantial gold demand, accounting for a quarter of global demand, necessitates around 800 metric tonnes of gold imports annually, leading to substantial dollar expenditure.
Jain emphasized that all imports, predominantly in US dollars, exert significant pressure on India’s foreign exchange reserves. He underscored that escalating global energy prices due to geopolitical tensions, particularly between the US and Iran, further escalate India’s import burden.
