Indian Prime Minister Narendra Modi has publicly called on citizens to "conserve both fuel and gold" as Middle East war tensions drive international oil prices higher. His remarks urging restraint on gold purchases sent precious metals-related stocks tumbling across Indian markets.
According to Bloomberg on the 10th (local time), Modi emphasized at a project launch ceremony in the southern Indian city of Hyderabad a day earlier that citizens should reduce their use of gasoline, diesel, and gas.
He said the current moment requires "using fuel with great care," urging citizens to consume only as much energy as necessary to cushion the Indian economy from the shock of war.
India is the world's third-largest crude oil importer. Given its heavy reliance on oil imports, rising international oil prices increase import costs, putting pressure on the trade balance and foreign exchange reserves. Amid the prolonged Middle East crisis, the Indian rupee has reportedly fallen to a record low.
Rising oil prices could also hit inflation and growth directly. The Reserve Bank of India has estimated that a 10% rise in international oil prices could lower economic growth by 15 basis points and raise inflation by 30 basis points.
Modi also proposed actively using remote work and online meetings as during the COVID-19 period, aiming to cut fuel consumption by reducing unnecessary vehicle and air travel.
"Don't Buy Gold for a Year" — Jewelry Stocks Plunge
Modi's appeal for restraint extended beyond energy. He urged citizens to choose domestic tourism over unnecessary overseas trips, foreign vacations, and overseas weddings to reduce foreign currency outflows. In particular, he asked citizens to refrain from non-essential gold purchases, saying, "For the next year, no one should buy gold jewelry regardless of the occasion."
The impact of the remarks was immediately reflected in the stock market.
According to Bloomberg and Indian media outlet Mint on the 11th, precious metals-related stocks on the National Stock Exchange of India (NSE) fell across the board. Titan fell more than 7% intraday, while Kalyan Jewellers India plunged more than 9%. Senco Gold dropped more than 10%, and PN Gadgil Jewellers fell about 9%. PC Jeweller and Tribhovandas Bhimji Zaveri also weakened in the 4% to 6% range.
It is unusual for an Indian prime minister to publicly request restraint on gold purchases. In India, gold is not merely a precious metal but a savings vehicle and a core consumption item at weddings and religious festivals, deeply embedded in daily life and culture.
However, India is the world's second-largest gold importer after China. It accounts for about 9% to 11% of global gold imports, and gold is the single largest item in India's merchandise imports after oil.
Gold imports in fiscal year 2025/26 fell about 4.7% year-on-year to 721 tons, but the import value reached a record high of $71.98 billion, or about 106 trillion won, due to rising international gold prices.
Trade Deficit May Narrow, but Consumption Hit Is Inevitable
Modi's appeal is seen as a measure aimed at defending foreign exchange reserves and reducing the trade deficit. India depends on overseas imports for most of its crude oil as well as gold and silver demand. When oil and gold prices rise simultaneously, import costs grow, intensifying pressure on the rupee.
The government also approved a credit guarantee plan of about $1.9 billion, or about 2.8 trillion won, to cushion the impact on businesses and airlines. The measure is aimed at responding to rising energy and aviation operating costs stemming from the Iran war.
However, it remains uncertain how effective the call for gold purchase restraint will actually be. Some analysts note that because gold is closely tied to India's wedding, festival, and savings culture, consumption is unlikely to decline sharply in the short term.
If demand declines, it could help narrow India's trade deficit and support the rupee. Conversely, it is likely to burden India's precious metals industry and related companies. Analysts also project that a slowdown in Indian demand could exert downward pressure on prices in global gold and silver markets.
