Modi urges Indians to skip gold, jewelry stocks sink on tariff fears

Gold stocks in India fell sharply after Narendra Modi urged households to avoid buying gold for a year, a message that hit a market where a necklace is often also a savings account and a wedding reserve. Titan, Senco Gold and Kalyan Jewellers dropped between 6% and 8% on Monday, underscoring how quickly a policy appeal can dent sentiment in a country that treats gold jewelry as both adornment and financial ballast.

The appeal, delivered on Sunday, May 10, came as part of a broader austerity push tied to the Iran war and surging oil prices. Modi also asked people to cut fuel use, work from home, reduce overseas travel and limit imports. That language immediately raised fears that India could move against gold imports, even though a government source said on Monday, May 11, that there were no plans to raise duties on gold and silver.

The market reaction made sense because India sits at the center of the global gold trade. The country is the world’s second-largest gold consumer and relies on imports for nearly all demand. In fiscal 2025-26, gold imports hit a record $71.98 billion, up 24% from $58 billion a year earlier, even as volumes slipped 4.76% to 721.03 tonnes. Switzerland supplied about 40% of those imports, followed by the United Arab Emirates and South Africa. With the rupee still under pressure near record lows, traders also worried that New Delhi could revive the kind of tariff moves used in 2012 and 2013, or even reverse the 2024 cut that brought the duty to 6% from 15%.

For jewelry makers, the deeper concern is not just a bad day on the stock market but a possible shift in household buying. The World Gold Council said India’s gold demand rose 10% year on year in the January-March 2026 quarter to 151 tonnes, yet jewellery demand fell 19% to 66.1 tonnes as investment demand overtook jewelry buying for the first time on record. That split matters in a wedding-driven market: when families move money into bars, coins and ETFs, bridal sets and festive purchases lose some of their lift.

The policy message may still prove temporary, but the stakes are large enough to rattle the sector. Surendra Mehta of the India Bullion and Jewellers Association warned that traders feared a sharp duty increase, while jewellers’ groups pushed a different answer: mobilize idle household gold instead of restricting fresh purchases. For now, the stock slide suggests investors heard something more than thrift. They heard a warning shot aimed at one of India’s most culturally embedded stores of value.