India, a Key Market for Swiss Gold May Cut Imports

Prime Minister Narendra Modi has urged Indian citizens to refrain from purchasing gold for at least one year, even for weddings. For a nation with long-standing cultural affinity to gold, the call for such restraint came as a surprise. Soon after Modi’s public appeal, India more than doubled custom-duties for the import of gold and silver from 6% to 15%, to further discourage precious-metal inflows.

India’s domestic gold demand is driven by jewellery, investment, and industrial use. About 85% to 90% of this demand is fed by imports and India pays for it in foreign currency. In 2025, India imported 640 tonnes of gold according to the World Gold Council. This figure does not include India’s central bank purchases.

However, since the war in West-Asia has driven up prices for oil, which is another major import for India, the country’s forex reserves have been under strain. The rupee has also fallen to an all time low.

As the war shows no signs of ending, India needs to brace for tougher times ahead and conserve its foreign reserves to pay for future oil bills and other necessary imports. For India, importing oil takes precedence over importing gold. Reducing dependence on imported gold may aid India to conserve these forex reserves.

“The prime minister’s clarion call to pull back on gold buying was not a restriction but an appeal to citizens to act responsibly, at a time when the nation faces broader economic challenges”, explains Sachin Jain, India CEO, World Gold Council. The demand for gold is still there, but the external supply needs to be curtailed.