Winning Bizness Desk
Mumbai.Jewellery company shares tumbled sharply on Monday after Prime Minister Narendra Modi appealed to citizens not to buy gold for one year to help the country save foreign exchange reserves. The statement, made during a public programme in Hyderabad, triggered panic among investors and raised fears of a slowdown in gold demand. Shares of major jewellery firms slipped immediately after the remarks, with market experts warning that stricter government measures on gold imports could follow in the coming months.
Sharp fall hits leading jewellery companies
The biggest blow was seen in jewellery stocks across the market. Investors rushed to sell shares as concerns grew over weakening demand and possible policy tightening by the Centre.
Key market movements included:
- Kalyan Jewellers shares plunged nearly 10%
- Senco Gold shares also dropped around 10%
- Titan Company shares slipped almost 7%
- PN Gadgil Jewellers fell close to 8%
- Thangamayil Jewellery declined around 6%
- Several smaller jewellery firms also traded in the red
Analysts said the reaction reflected fears that consumers may delay purchases if the Prime Minister’s appeal gains wider public support.
PM links appeal to economic pressure
Addressing the Hyderabad event, PM Modi said India must act carefully at a time when global tensions and rising crude oil prices are putting pressure on the economy. He urged citizens to adopt measures that could help reduce unnecessary spending and save foreign exchange reserves.
The Prime Minister gave three major suggestions during the programme:
- Avoid buying gold for one year
- Adopt work-from-home culture wherever possible
- Reduce unnecessary travel and foreign tours
Government sources believe India’s large gold imports put additional pressure on the country’s dollar reserves, especially when oil prices are already rising due to continued tensions in West Asia.
Import duty hike fears deepen uncertainty
Industry leaders fear the government may now consider increasing import duty on gold. Speaking to CNBC, Senco Gold Managing Director Suvankar Sen said the Prime Minister’s remarks have increased the possibility of higher taxes on imported gold.
According to him, if import duty is raised further, gold demand in India could fall by nearly 10% to 12%. He also confirmed that representatives of jewellery associations are expected to meet officials from the Prime Minister’s Office on Tuesday to discuss the matter.
Market observers say any increase in import duty would make gold more expensive in domestic markets and may further weaken jewellery sales during the festive and wedding seasons.
Gold imports may hit three-decade low
A Reuters report said India’s gold imports in April could fall to their lowest level in nearly 30 years. The slowdown comes after banks reportedly stopped shipments following a sudden demand for 3% Integrated GST on imports.
India is the world’s second-largest consumer of gold, making any slowdown significant for the global bullion trade. During financial year 2026, India imported an average of nearly 60 tonnes of gold every month.
Important figures linked to gold imports:
- Monthly gold import bill stood near 6 billion dollars
- This equals nearly Rs 57,000 crore every month
- Lower imports may help reduce pressure on forex reserves
- Jewellery traders fear weaker business sentiment ahead
Understanding import duty and its impact
Import duty is the tax imposed by the government on goods brought from other countries. When import duty on gold rises, the price of gold in India also increases because importers and jewellers pass on the extra cost to buyers.
Experts say higher prices usually reduce demand, especially among middle-class families and small buyers. With the government now openly asking citizens to avoid gold purchases temporarily, the jewellery sector may continue to face pressure in the stock market as well as in retail demand over the coming months.
