Shares of Indian jewellers slide after Modi urges pause on gold purchases

MUMBAI: Shares of Indian jewellery retailers tumbled on Monday after Prime Minister Narendra Modi urged people to refrain from buying gold for a year to protect foreign exchange reserves, stoking fears that tariff hikes to curb imports of the metal may be in the offing.

The Iran war has sent oil prices surging and that in turn has resulted in mounting pressure on India’s balance of payments and the rupee.

India is the world’s third-largest oil importer and consumer, meeting more than 90percent of its crude oil needs and about half of its natural gas demand through imports.

Modi’s remarks about gold on Sunday came in tandem with a range of other measures urged, including fuel conservation, increasing working from home and limits on travel and imports. Gold is in high demand in India, particularly for weddings with gold jewellery seen as a crucial part of a bride’s attire and a popular gift from family and friends. While it is the world’s second-largest gold consumer, India relies on imports to meet nearly all of its demand.