PM's appeal to postpone gold buying could hurt jewellery industry, says Gem and Jewellery Domestic Council

The gems and jewellery industry is likely to face an adverse impact after Prime Minister Narendra Modi appealed to citizens to postpone gold purchases for a year to help conserve foreign exchange amid the West Asia crisis, the All India Gem and Jewellery Domestic Council (GJC) said on Monday.

GJC Chairman Rajesh Rokde said the gems and jewellery industry, which provides direct and indirect jobs to over a crore of people, will come into stress after the prime minister's appeal.

"We understand the prime minister's appeal regarding responsible gold consumption reflects the larger national concern of rising imports and pressure on foreign exchange reserves. At the same time, India already possesses thousands of tonnes of idle household gold. The solution may not lie only in reducing demand, but also in unlocking the immense value of existing gold through a transparent and regulated Gold Monetisation Scheme (GMS)," he said.

He said this might also lead to revenge buying as seen in the past when people buy more when restricted.

Industries like BFSI, retail, e-commerce, jewellery designing, logistics among others will also be impacted as they are connected with the gems and jewellery industry. "Therefore, we urge the government to rethink on this decision," he added.

GJC vice chairman Avinash Gupta stated that gold has always been emotionally and culturally connected to Indian households.

"But today, the nation also faces the challenge of balancing gold demand with economic stability. Respecting the Prime Minister's vision for national interest, the industry believes that a robust and regulated Gold Monetisation Scheme can become a long-term solution for India," he said.

Instead of idle gold remaining locked in households and lockers, he said, GMS can channel it into the formal economy - reducing imports, easing CAD pressure and strengthening Indiaas financial ecosystem.

The answer lies not only in consuming less gold, but in utilising existing gold more efficiently, transparently and productively, Gupta added.

The Prime Minister on Sunday called for judicious use of fuel, postponement of gold purchases and foreign travel, among other measures, to strengthen the economy.

Addressing a rally organised by the Telangana BJP in Hyderabad, he suggested reducing petrol and diesel consumption, using metro rail services in cities, carpooling, increased use of electric vehicles (EVs), utilising railway services for parcel movement, and working from home to conserve foreign exchange amid the crisis in West Asia.