New delhi: Indian Prime Minister Narendra Modi has asked citizens to refrain from buying gold for one year in order to help stabilize the rupee and protect international reserves amid volatile global economic conditions stemming from the conflict between the United States and Iran.

According to Thai News Agency, Prime Minister Modi has appealed to the public to reduce domestic gold purchases for a year, as India is the world's second-largest gold importer. Gold purchases are typically paid in US dollars, resulting in massive capital outflows. In fiscal year 2026, India imported $72 billion worth of gold, representing almost 10% of its total imports. Meanwhile, the rupee has been continuously weakening, reaching around 95 rupees per dollar. Reducing the demand for dollars from gold imports would help alleviate pressure on the rupee.

Meanwhile, with oil prices soaring above $100 per barrel and the closure of the Strait of Hormuz for over two and a half months, further exacerbating India's fuel costs, the government prefers to conserve dollars for importing oil and essential goods to fuel the economy, rather than purchasing luxury items like gold.

In addition, Prime Minister Modi also requested cooperation from the public in other areas, including reducing fuel consumption, working from home to reduce energy consumption from travel, postponing international travel, and refraining from holding weddings abroad in order to reduce spending in foreign currency and instead use domestically produced goods. Modi stated that these austerity measures are similar to those implemented during the COVID-19 pandemic and will help reduce fuel consumption and save foreign currency.

Following the announcement, shares of major gold retailers and jewelry companies like Titan Co. and Kalyan Jewellers immediately fell by approximately 6-10 percent on the Mumbai Stock Exchange. However, many point out that this is currently only a request for cooperation and there has been no official ban or increase in import tariffs. Meanwhile, local media reported that if Indians could reduce their gold purchases by just 30-40 percent, it would save between $20-25 billion.