Gold Stocks Sink After Modi’s Appeal to Cut Gold Imports

Mumbai: Shares of major jewellery and luxury retail companies witnessed a sharp decline on Monday after Prime Minister Narendra Modi appealed to citizens to temporarily reduce non-essential imports, including gold purchases and overseas travel, amid mounting pressure on India’s foreign exchange reserves due to the escalating West Asian conflict.

Shares of Titan Company dropped more than seven per cent during intraday trade, while Kalyan Jewellers India, Senco Gold and Sky Gold and Diamonds plunged over 10 per cent each. Other companies in the sector, including PC Jeweller, also came under heavy selling pressure.

The broader market also remained weak, with benchmark indices falling more than one per cent in early trade as concerns over rising crude oil prices and external account stress weighed on investor sentiment.

Addressing the nation, Modi urged people to help conserve foreign exchange reserves by postponing discretionary spending on imported goods. He cited soaring oil and fertiliser prices caused by instability in West Asia and warned that prolonged disruptions in global supply chains could intensify economic challenges.

Market analysts said the Prime Minister’s appeal signaled growing concern within the government over India’s widening current account deficit. Experts noted that sectors dependent on imports or discretionary consumer spending could face near-term pressure if austerity measures gain traction.

The warning comes as India’s forex reserves continue to decline. India’s foreign exchange reserves dropped by $7.79 billion to $690.69 billion in the week ending May 1, according to the Reserve Bank of India (RBI). In the previous week, the reserves had already fallen by $4.82 billion.

The reserves had reached a record high of $728.49 billion in late February before the West Asia crisis began. Since then, the reserves have been falling as the Indian rupee came under pressure, forcing the RBI to sell dollars to help stabilise the currency.

India remains world’s second largest gold importers, bringing in nearly 60 tonnes every month.