Modi Urges Indians to Cut Gold Buying and Overseas Spending as Global Risks Rise

• PM Modi has appealed to Indians to avoid unnecessary gold purchases and foreign travel.

• The appeal is linked to conserving foreign exchange and supporting swadeshi consumption.

• Gold imports and crude oil dependence are adding pressure to India’s external finances.

• India posted 7.8% GDP growth in the June quarter despite global uncertainty.

• The government wants domestic spending to support self-reliance and economic resilience.

Prime Minister Narendra Modi has renewed his call for Indians to avoid buying gold unless necessary and to defer non-essential foreign travel, including destination weddings abroad, as the government sharpens its focus on self-reliance amid global economic uncertainty.

The appeal was made on Tuesday through a video message from Bishkek. Modi said India was continuing to move ahead despite wars, unstable global markets and supply-chain disruptions. However, he emphasised that citizens also had a role to play in strengthening the economy by choosing swadeshi products and reducing avoidable spending that sends foreign exchange out of the country.

Modi specifically asked people to reconsider leisure trips abroad, overseas weddings and unnecessary gold purchases. His message was not a blanket opposition to foreign travel or gold ownership, but an appeal to limit discretionary spending at a time when external risks are elevated.

The government’s concern over gold is rooted in India’s import dependence. India meets almost all of its gold demand through overseas purchases, making bullion one of the country’s largest import items after crude oil. When domestic demand for gold rises, more foreign currency is used to pay for imports. This can widen the trade deficit and increase pressure on the rupee, particularly when demand for dollars is already high.

Gold imports have increased significantly this year. Shipments during the first four months of the financial year that began in April were more than 32% higher than a year earlier. At the same time, India’s merchandise trade deficit widened to nearly US$32 billion in July, the highest level since January.

This makes gold a sensitive issue for policymakers. Unlike machinery, technology or industrial inputs, which can support future production, much of India’s gold demand is linked to savings, weddings, religious customs and cultural practices. India is also the world’s second-largest buyer of bullion, meaning even a modest shift in consumer behaviour can affect the import bill.

The concern becomes more serious when crude oil prices are high. India imports more than 88% of its crude oil requirement, so any sustained increase in global oil prices directly raises the country’s import costs. Tensions in West Asia and disruptions around the Strait of Hormuz have kept energy markets vulnerable to further shocks.

If oil imports become more expensive while gold imports also rise, the combined effect can put greater strain on India’s trade balance and currency. Modi’s message is therefore aimed at reducing avoidable foreign-exchange outflows at a time when the external environment remains uncertain.

Foreign holidays and destination weddings form another part of this argument. When Indians travel abroad, they spend on flights, hotels, food, transport, shopping and other services outside India. Overseas weddings can involve even larger expenses, much of which benefits foreign economies rather than domestic businesses.

Modi’s appeal is tied to a broader swadeshi message: if certain spending can reasonably take place within India, people should consider doing so. The focus is on non-essential

travel, not work, study, medical visits or unavoidable international trips.

This is not the first time the prime minister has made such an appeal. In May, when the economic impact of the US-Iran conflict was particularly sharp, Modi had urged Indians to avoid gold purchases for a year, postpone unnecessary foreign travel and conserve petrol and diesel. He also encouraged practices such as work from home, virtual meetings, public transport, carpooling and shifting more freight from roads to railways.

His latest appeal comes even as India reported stronger-than-expected economic growth. The economy expanded 7.8% in the June quarter, showing resilience despite global disruption. However, growth was slower than the 8.6% recorded in the March quarter, and concerns remain over inflation, monsoon conditions and the durability of consumption-driven growth.

The government’s message is that strong growth should not lead to complacency. Instead, India should use its current momentum to strengthen the foundations of the economy and reduce exposure to global shocks.

There are three broad objectives behind Modi’s appeal. The first is conserving foreign exchange. Lower non-essential imports can reduce demand for dollars and ease pressure on the rupee and the trade deficit.

The second is reducing vulnerability to external shocks. India remains heavily dependent on imported crude oil and foreign gold supplies. Cutting discretionary import demand can provide some protection when commodity prices rise or shipping routes are disrupted.

The third is supporting domestic businesses. If Indians choose Indian products, local holidays and domestic services over foreign alternatives, more money stays within the national economy. This aligns with Modi’s larger push for self-reliance and his vision of a developed India by the 100th year of independence.

Gold is particularly sensitive at the moment because global prices have risen sharply amid uncertainty. Bullion gained almost 10% in August, its strongest monthly rise since January, driven by concerns over sovereign debt, currency weakness and expectations around US monetary policy. Spot gold was trading around US$4,430 an ounce on Tuesday.

For Indian consumers, higher global prices make imported gold more expensive in rupee terms. Strong domestic demand at elevated prices can therefore increase the import bill further.

Gold remains a complex asset during geopolitical crises. Uncertainty often boosts its appeal as a safe-haven investment, but higher oil prices can also feed inflation and keep interest rates elevated, which may reduce gold’s attractiveness because it does not provide interest income.

For the government, however, the core issue is straightforward. Whether gold prices rise or fall, India must spend foreign currency to import most of the metal. Modi’s renewed appeal is therefore aimed at persuading citizens to make spending choices that support domestic resilience, conserve foreign exchange and strengthen India’s long-term economic self-reliance.