India's Gold Imports: Breaking Down the Numbers Behind PM Narendra Modi's Latest Initiative

India's Gold Imports Under Scrutiny Amid Economic Uncertainty

India, the world's second-largest gold consumer, has been importing over 90% of its gold requirements due to limited domestic production. The country consumes roughly 700 to 800 tonnes of gold annually, driven by strong demand from households, weddings, festivals, investment buying, and rural savings. This dependence on imports has become a concern, especially with Prime Minister Narendra Modi urging citizens to postpone non-essential gold purchases for the next year due to growing economic uncertainty.

The Prime Minister's call to action comes as geopolitical tensions in West Asia push up oil and fertiliser prices, straining global supply chains. Addressing a rally in Hyderabad on Sunday, Modi also asked people to cut fuel consumption, use public transport, adopt electric vehicles, avoid non-essential foreign travel, and support domestically made products. Gold remains one of India's biggest import expenses after crude oil, accounting for nearly 9% of the country's total import bill.

India's gold imports have already slowed sharply in recent months, with imports falling from nearly 100 tonnes in January to around 65-66 tonnes in February, before dropping further to 20-22 tonnes in March. April imports are estimated at just 15 tonnes, among the lowest monthly levels seen in decades outside the Covid period. Industry experts attribute the decline in gold imports to supply disruptions, delays in bank authorisations, customs clearances, and tax-related uncertainty, which have tightened bullion availability in the domestic market.

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The concern comes as India's festive and wedding season is still ahead, traditionally the strongest period for gold demand. Policymakers appear keen to contain non-essential imports before pressure on the import bill intensifies further. With the country's gold imports already affecting its current account deficit and foreign exchange reserves, the situation is being closely monitored by authorities.