India urges curb on gold buying as imports hit $72bn, market debates duty hike and digital settlement

Prime Minister Narendra Modi has appealed to Indians to avoid excessive gold purchases, citing a surge in imports that reached nearly $72 billion in FY2025‑26 and pressure on the rupee. The government responded by raising import duties on gold and silver to 18 percent, after earlier cuts were seen to have encouraged higher imports. Industry experts say gold is regarded as “financial armour” and that public appeals alone are unlikely to curb demand, with one trader noting, “Someone who has a marriage at home or wants to buy gold will buy it regardless.”

The bullion market was already weakening, with jewellery sales down about 70 percent and silver jewellery demand falling 20‑30 percent, while gold ETFs remain stable. A proposal for a sovereign gold‑backed digital settlement system, which would settle transactions in tokenised gold rather than US dollars, has been floated as a way to reduce India’s dollar outflow from bullion imports.