IBJA Backs Gold Import Curbs to Protect Forex; Proposes Monetising 1,000 Tons of Temple Gold

The India Bullion and Jewellers Association is backing recent policy steps to reduce pressure from gold imports on India's foreign exchange reserves, while arguing that small jewellers and artisans must stay protected as demand cools due to higher taxes and public appeals to limit new purchases.

After Prime Minister Modi urged citizens to cut back on fresh gold buying, the government quickly lifted excise duty on the metal from 6% to 15%, a move India Bullion and Jewellers Association Gujarat State President Nainesh Pachchigar described as designed to reduce forex outflows yet still allow the trade to function, ANI reported.

Gold imports, IBJA proposals and idle temple reserves

Pachchigar underlined the scale of the issue, stating, "Gold is the second-largest contributor to foreign exchange outflow from the country," and noting that India brings in around 800 tons of gold annually, which the industry believes can be partly offset if large idle domestic holdings are monetised in a structured way.

The association has therefore suggested a national scheme to tap nearly 1,000 tons of gold currently resting with religious trusts and temples, arguing that even partial use of this stock could reduce import needs and support the rupee without hurting cultural traditions or private ownership rights.

Gold imports, jeweller advisory and curbs on bullion trading

The India Bullion and Jewellers Association has clarified that the gold monetisation proposal does not seek a permanent transfer of temple holdings to the state, but aims to keep the metal circulating within the formal economy through regulated channels that respect existing ownership.

Alongside the policy pitch, Pachchigar issued a strong advisory to market participants. "We appeal to all jewellers not to engage in bullion trading and not to sell bullion directly to customers... we request jewellers not to sell bullion above five grams." The guideline followed the duty hike and targets non-essential, speculative buying.

Gold imports, jewellery demand and employment concerns

The association has drawn a clear line between essential jewellery demand and investment-led bullion buying, stressing that sales for weddings, religious functions and other genuine needs should continue, while urging members to restrict high-value bullion deals that might increase imports and weaken the external account.

Pachchigar emphasised the human cost if the sector contracts sharply, saying, "We request that jewellery sales continue only to the extent genuinely required by customers," while warning that "another important concern is employment, especially for small labourers and workers... whose livelihoods depend on the jewellery industry."

With many small shops already squeezed by higher input prices and softer consumer sentiment, the India Bullion and Jewellers Association has promised to work with authorities so that monetising gold stored in community and religious funds can help keep smaller businesses open and safeguard jobs as the country adjusts to stricter controls on imports.

Pachchigar restated the broader stance of the trade during this period, declaring, "At this moment, we must stand with the government... we want to sit together with the government and find a practical solution," while maintaining that planned monetisation and advisory steps should also help protect employment in the jewellery value chain.

With inputs from ANI