foreign exchange reserves

India has significantly increased import tariffs on gold and silver to 15% from 6% to curb imports and protect foreign exchange reserves. This move follows Prime Minister Modi's appeal for citizens to avoid gold purchases for a year, aiming to narrow the trade deficit and support the rupee amid global economic pressures.

Economists believe India’s foreign-exchange reserves are still sufficiently strong to shield the rupee from the oil price shock triggered by the Iran conflict, with the country’s reserve buffers remaining far healthier than the levels seen during the 2013 taper tantrum.

Prime Minister Modi urged Indians to halt gold purchases for a year to protect foreign exchange reserves, a call supported by GTRI which highlighted a surge in gold imports straining the trade balance. Union Minister Ashwini Vaishnaw echoed the appeal, emphasizing reduced import spending amid Middle East conflict, leading to a sell-off in jewellery stocks.

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In Buxar, jewellery merchants express deep concern following Prime Minister Modi's suggestion to curtail gold purchases. They argue that such measures could jeopardize jobs and threaten the livelihood of small enterprises. Gold, they insist, holds immense cultural value and provides financial security for many rural and middle-class households.

India's foreign exchange reserves experienced a significant drop of $7.794 billion, reaching $690.693 billion in the week ending May 1. This decline, primarily driven by a fall in foreign currency assets and gold reserves, follows a previous decrease. The central bank's intervention in the forex market to support the rupee is a key factor behind this trend.

The Indian rupee hit a new low against the US dollar, pressured by rising oil prices and external debt. Analysts link the decline to the US-Iran conflict, which has boosted crude oil costs and strained India's economy. While the RBI and government are intervening, markets anticipate potential interest rate hikes to stabilize the currency and manage inflation.

The Indian Rupee hit a record low of 95.63 against the US dollar amid escalating geopolitical tensions and fragile investor sentiment. Intensifying Middle East conflict, rising oil prices, and sustained foreign fund outflows are pressuring the currency. This economic uncertainty is also reflected in a significant dip in domestic stock markets.

Prime Minister Narendra Modi urged Indians to reconsider overseas travel and embrace domestic tourism due to rising global crude oil prices and geopolitical uncertainties. He emphasized that conserving foreign exchange reserves and supporting local businesses is a patriotic duty during challenging economic times, encouraging reduced use of imported products and increased reliance on public transport and EVs.

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In its latest study on emerging-market sovereigns, the agency notes that India has ranked among the more resilient economies since 2020, based on multiple indicators such as sovereign bond spreads, domestic yield movements, and exchange-rate stability.

Prime Minister Narendra Modi's appeal to curb non-essential gold purchases has raised concerns within Odisha's jewellery industry. Jewellers argue gold is integral to traditions, and a slowdown threatens the livelihoods of artisans and goldsmiths who depend on steady demand, especially during wedding and festival seasons.

RBI is not alone in repatriating its gold reserves. Several central banks like France’s Banque de France, Germany’s Deutsche Bundesbank, Serbia’s National Bank have done the same - buy why?

India’s gold imports hit a record $71.98 billion in 2025-26, rising over 24% from $58 billion a year earlier. This was largely due to skyrocketing global gold prices, which have bumped up the value of imported gold.

India's jewellery industry urges against curbing gold purchases, emphasizing its cultural significance as savings and tradition. Instead, they propose enhanced gold recycling and domestic mobilization to ease foreign exchange pressure. This approach aims to protect millions of livelihoods tied to the sector, from artisans to small businesses, by circulating existing gold rather than stifling demand.

India's central bank significantly boosted its gold reserves, bringing back 104 metric tonnes domestically between October 2025 and March 2026. This move, amid global geopolitical tensions and a decline in foreign currency assets, saw gold's share in forex reserves rise to 16.7%. Globally, central banks are increasingly repatriating gold, reflecting a growing trend towards bolstering national sovereignty.

PM Modi has called on citizens to adopt measures aimed at conserving foreign exchange, as the surge in oil prices triggered by the Iran conflict has intensified pressure on the rupee and strained India’s foreign exchange reserves.

India has significantly increased import duties on gold and silver to 15% from 6%, aiming to curb rising imports and conserve foreign exchange amid the West Asia crisis. This move follows Prime Minister Modi's appeal for austerity and aims to ease pressure on the rupee and the country's balance of payments.

Prime Minister Narendra Modi has urged citizens to adopt lifestyle changes to conserve foreign exchange and mitigate the economic impact of global energy crises. Key suggestions include reducing fuel consumption by using public transport, carpooling, and opting for electric vehicles, alongside reviving work-from-home policies and limiting discretionary spending on gold and foreign travel.