PM Modi’s Gold Warning Triggers Panic Bridal Jewellery Buying Before Wedding Season

Prime Minister Narendra Modi's recent appeal to avoid buying gold for a year has sparked panic buying across the country, particularly for bridal jewellery, driven by fears of higher import duties and possible GST hikes amid West Asia crisis. In a move aimed at protecting the stability of the Indian economy and conserving foreign exchange reserves, the government has increased the import duty on gold and silver from 6% to 15%, effective May 13.

Following the announcement, panic buying has intensified ahead of the wedding season, which typically accounts for 50-60% of annual jewellery demand. Jewellers said that customers are rushing to purchase ornaments, especially with the wedding season beginning in June and continuing until mid-August. Rajesh Rokde, chairman of the All India Gem & Jewellery Domestic Council, noted that gold sales have risen by 15-20% as consumers buy ahead of potential tax increases.

"Some are even buying for weddings in the November-December period as they are confused that the government might ban gold buying," Varghese Alukkas, managing director of Joy Alukkas, told Economic Times.

One of the key drivers behind the panic buying is the wave of rumours circulating in the market. Suvankar Sen, managing director and CEO of Senco Gold, commented, "Some are saying import duty will go up, others are saying GST will be increased from the current 3%. This uncertainty has prompted consumers to buy bridal jewellery."

However, soaring gold prices are also changing buying patterns, with consumers increasingly opting for lightweight bridal jewellery instead of traditional heavy pieces. According to Sen, gold prices are expected to remain elevated for at least another year. "Volumes might get impacted by 10-15%, but value-wise, it will remain at a higher level. Consumers will buy lighter-weight jewellery," he said.

The government's strategic move has further unsettled the jewellery sector, which was already grappling with raw material supply disruptions caused by the West Asia crisis. Industry experts warn that even a temporary slowdown in gold purchases could have a cascading effect on the broader market ecosystem.

Brijesh Goyal, chairman of the Chamber of Trade & Industry (CTI), told IndiaToday.in that India consumes around 700-800 tonnes of gold annually, making it one of the world's largest gold markets. "If consumers stop buying gold for a year, consumption could fall from nearly 800 tonnes to around 500 tonnes," Goyal said. According to him, the industry fears losses of nearly Rs 10,000 crore if gold demand sees a prolonged decline following the Prime Minister's remarks.

If consumers delay purchases, the impact is likely to extend beyond jewellery showrooms to karigars, polish workers, delivery staff and small artisans who depend on the industry for their livelihood.

"Small jewellers, artisans and goldsmiths are worried that they may face difficulty paying salaries to workers if sales decline substantially," Goyal added, warning that prolonged weakness in demand could eventually lead to layoffs.