Winning Bizness Desk
Mumbai.Jewellery stocks witnessed a sharp selloff on Monday after Prime Minister Narendra Modi appealed to citizens to avoid buying gold for one year to help the country manage rising economic pressure. The statement, made during a public programme in Hyderabad, triggered panic among investors, leading to a steep fall in shares of leading jewellery companies. Market experts believe the appeal could directly hit gold demand in India, one of the world’s biggest consumers of the precious metal.
Sharp fall hits major jewellery companies
Shares of major jewellery firms fell as much as 10% during the trading session after the Prime Minister’s remarks became public. Investors rushed to book profits amid fears of weak demand and possible government action on gold imports.
Key market movements included:
- Kalyan Jewellers shares plunged nearly 10%
- Senco Gold also dropped around 10%
- Titan Company shares slipped close to 7%
- PN Gadgil Jewellers declined about 8%
- Thangamayil Jewellery fell around 6%
- Smaller jewellery stocks also traded under pressure
Analysts said the sudden reaction reflects concerns that the government may tighten policies linked to gold imports in the coming months.
PM cites economic pressure and oil crisis
Addressing the Hyderabad event, PM Modi said the country needs to save foreign exchange reserves at a time when global uncertainty is rising. He pointed to the continuing tensions in West Asia and rising crude oil prices as major risks for the Indian economy.
The Prime Minister urged people to adopt three habits for the next year:
- Avoid buying gold for one year
- Increase work-from-home practices
- Cut unnecessary domestic and foreign travel
Economists say India spends billions of dollars every month on gold imports, and any reduction in purchases could help reduce pressure on the current account deficit and the rupee.
Import duty fears worry jewellery sector
Industry leaders believe the Prime Minister’s comments may be an indication of stricter government measures ahead. Speaking to CNBC, Senco Gold Managing Director Suvankar Sen said the chances of an increase in gold import duty have now become stronger.
According to him, if the government raises import duties, gold demand in India may decline by 10% to 12% over the next few months. He also confirmed that representatives from jewellery associations are scheduled to meet officials from the Prime Minister’s Office on Tuesday to discuss the matter and understand the government’s future policy direction.
Imports may hit three-decade low level
Meanwhile, a Reuters report suggested that India’s gold imports in April may fall to their lowest level in nearly 30 years. The report said several banks have temporarily stopped gold shipments after facing sudden demands related to a 3% Integrated GST payment.
India remains the world’s second-largest consumer of gold after China. Any major slowdown in imports or demand could affect not only jewellery retailers but also traders, refiners and bullion markets across the country.
Big monthly spending under government watch
Official estimates show that during financial year 2026, India imported nearly 60 tonnes of gold every month on average. The country reportedly spent nearly 6 billion dollars every month on these imports, equal to around Rs 57,000 crore.
Experts believe the government is now trying to reduce non-essential imports to protect foreign reserves amid global uncertainty.
Important takeaways from the situation:
- Gold demand may weaken in coming quarters
- Import duties could rise if pressure increases
- Jewellery sector may remain volatile in markets
- Investors are closely watching government signals
- Industry bodies are preparing discussions with officials
Market watchers say the next few weeks will be crucial for the jewellery sector as investors await clarity on whether the Prime Minister’s appeal was only advisory or part of a larger economic strategy.
