Could avoiding gold purchases for a year strengthen India’s economy? Experts say gold prices may still witness a major surge by 2027 despite weaker demand
Economists also argue that reducing gold imports could help stabilise the rupee against the US dollar. A stronger rupee may eventually reduce the cost of imported essentials such as petrol, diesel and cooking gas. Lower import costs could also help control inflation and ease financial pressure on middle-class households by keeping prices of daily-use items more stable.Market analysts believe that if Indian consumers reduce gold purchases for a year, domestic demand could temporarily soften. However, experts still expect gold prices to remain strong globally due to inflation and economic uncertainty. Some estimates suggest that by 2027, gold prices in India could rise to nearly Rs 85,000-Rs 95,000 per 10 grams. Analysts say a stronger economy and higher purchasing power may help consumers absorb future price increases more comfortably.The government is increasingly encouraging investors to shift towards alternatives such as Digital Gold and Sovereign Gold Bonds (SGBs) instead of buying physical gold jewellery or gold bars. These options reduce the need for large-scale physical gold imports while still allowing investors to benefit from rising gold prices. Sovereign Gold Bonds also offer annual interest payments from the government, making them attractive for long-term investors.However, the appeal has also triggered concerns within India’s jewellery industry. Millions of workers, artisans and small business owners depend heavily on wedding and festive-season gold demand for their livelihood. Industry observers say any major decline in gold buying could temporarily affect the jewellery ecosystem. At the same time, the government argues that such measures represent short-term financial discipline aimed at strengthening India’s long-term economic resilience and reducing external financial pressure.
Stay Ahead, Read Faster
Scan the QR code to download the News18 app and enjoy a seamless news experience anytime, anywhere.
Prime Minister Narendra Modi has urged citizens to avoid unnecessary gold purchases for at least a year as part of a broader effort to strengthen India’s economy. India is the world’s second largest gold importers (after China), especially during wedding and festive seasons when massive quantities of gold are brought into the country. Experts say heavy gold imports put pressure on India’s foreign exchange reserves and weaken the rupee against the dollar, prompting fresh discussions around reducing dependence on imported gold.
