PM Modi Is Not The 1st Leader To Ask People To Stop Buying Gold- Here’s Why Governments Make Such Appeals

Prime Minister Narendra Modi's recent appeal asking Indians to avoid buying gold for weddings for one year surprised many people across the country.

In India, gold is not just a luxury item. It is deeply connected with weddings, traditions, savings and family security. For generations, Indian households have treated gold as a symbol of prosperity and financial protection.

So when the Prime Minister urged people to temporarily avoid gold purchases, the statement quickly sparked debate online, in financial markets and among middle-class families.

However, experts say the appeal was not only about jewellery or weddings. It was linked to a much larger economic concern - protecting India's foreign exchange reserves during a period of rising global uncertainty.

Why PM Modi Asked People To Avoid Buying Gold

The Prime Minister's remarks came at a time when global crude oil prices have surged sharply because of tensions in West Asia and disruptions around the Strait of Hormuz, one of the world's most important oil shipping routes.

Oil prices reportedly jumped from nearly $70 per barrel to around $126 per barrel within weeks, increasing pressure on oil-importing countries like India.

India imports a large portion of its crude oil needs from abroad. Since these imports are paid for in US dollars, rising oil prices increase the country's demand for foreign currency and put pressure on the rupee.

During his speech, PM Modi repeatedly stressed the need to reduce fuel consumption and conserve foreign exchange reserves.

"Petrol-diesel has become so expensive across the world. It is the responsibility of all of us that the foreign exchange spent on purchasing petrol-diesel should also be saved by conserving petrol-diesel," the Prime Minister said.

He then made another appeal that drew widespread attention.

"I would appeal to people not to buy gold for weddings for one year," he said.

Why Gold Imports Matter To India's Economy

India is one of the world's largest consumers of gold.
However, the country produces very little gold domestically and depends heavily on imports. Every time Indians buy imported gold, India spends valuable US dollars to pay for those imports.

During normal economic conditions, this may not create major stress. But during global crises - especially when oil prices rise sharply - governments become more cautious about how foreign exchange reserves are being used.

Economists say this is why leaders often ask citizens to reduce "non-essential imports" like luxury goods and gold during difficult periods.

PM Modi Is Not The First Leader To Make Such An Appeal

Although the statement may sound unusual today, PM Modi is not the first political leader to ask citizens to reduce gold purchases during an economic crisis.
India and several other countries have seen similar appeals in the past.

Morarji Desai And The Gold Control Act

One of the most famous examples came in the 1960s under Morarji Desai, who was then serving as India's Finance Minister.

After the 1962 India-China war, India faced a severe foreign exchange crisis.

To reduce gold imports and redirect savings into the economy, the government introduced the controversial Gold Control Act.

The law restricted the possession of gold bars and coins and reduced jewellery purity limits from the traditional 22-carat standard to 14-carat gold.

What Happened After The Gold Control Law?

The policy created massive controversy across the country.

Thousands of traditional goldsmiths reportedly lost work because Indian consumers did not prefer 14-carat jewellery for weddings and cultural use.

Instead of reducing gold demand completely, the restrictions also led to the rise of illegal gold smuggling networks across India.

The underground smuggling economy later became a major subject in Indian films and crime stories during the 1970s and 1980s.

Eventually, the Gold Control Act was repealed in 1990.

P Chidambaram Made Similar Appeal In 2013

Another similar situation emerged in 2013 when India faced pressure on the rupee and a widening Current Account Deficit (CAD).

At that time, then Finance Minister P. Chidambaram repeatedly appealed to Indians to reduce gold buying.

He had famously said that if he had one wish, it would be for Indians not to buy gold for six months to one year.

The government later increased import duties on gold to reduce imports and protect the rupee.

Similar Action Was Taken In The United States Too

India is not the only country where governments have intervened in gold ownership during crises. In 1933, during the Great Depression, US President Franklin D. Roosevelt introduced Executive Order 6102.

The order effectively forced American citizens to hand over much of their gold to the government at a fixed price.

The move was aimed at stabilising the economy and giving the government greater control over monetary policy during a severe economic downturn.

Why Gold Becomes A Target During Crises

Experts say there is a common pattern behind such government appeals across different countries and time periods.

Usually, the sequence looks like this:

• A war or geopolitical crisis increases uncertainty
• Oil prices rise sharply
• Foreign exchange reserves come under pressure
• Currency value weakens
• Governments try to reduce imports considered non-essential

Since gold imports require large amounts of foreign currency, governments often ask people to reduce purchases temporarily.

Market Reaction After PM Modi's Appeal

The Prime Minister's remarks also affected financial markets.
Shares of jewellery companies such as Titan and Kalyan Jewellers reportedly witnessed sharp declines after investors feared reduced demand during the wedding season.
Gold futures prices also saw pressure as traders anticipated lower buying interest if consumers delayed purchases.

At the same time, opposition leaders criticised the appeal, arguing that gold purchases are deeply linked to Indian social customs and middle-class savings habits.

A Debate Between Tradition And Economic Pressure

The discussion around PM Modi's statement highlights the tension between economic management and cultural traditions in India. For millions of families, gold remains emotionally and financially important, especially during weddings.

However, during periods of economic stress, governments often encourage citizens to reduce spending on imported luxury items to protect the broader economy.
Whether Indians will actually reduce gold purchases remains uncertain.

But history shows that during wars, currency pressure and oil crises, governments across the world have repeatedly turned to citizens for economic cooperation - and gold often becomes part of that conversation.