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With gold imports straining India's foreign exchange reserves, the India Bullion and Jewellers Association (IBJA) is backing the government's move to curb demand and has proposed a monetisation scheme for nearly 1,000 tons of idle temple gold.
If implemented, the industry body said the plan could ease pressure on imports while protecting jobs in the small jeweller and artisan segment, even as it urges members to restrict bullion sales above 5 grams. Following Prime Minister Modi's appeal to citizens to reduce gold purchases, IBJA's Gujarat State President Nainesh Pachchigar said the industry has "decided to stand in support of the government" and is holding meetings nationwide to balance national interest with business continuity. The government responded swiftly by raising excise duty on gold from 6% to 15%, a step Pachchigar said was taken to help businesses survive while reducing forex outflows. "Gold is the second-largest contributor to foreign exchange outflow from the country," Pachchigar noted, adding that India imports around *800 tons of gold annually*. To ease this burden, IBJA has proposed utilising gold held by trusts. "Many trusts currently hold large quantities of idle gold -- nearly 1,000 tons in total. If even a portion of that gold can be utilised, it would help significantly," he said. The association clarified it is not seeking a permanent transfer of ownership to the government, but rather a structured monetisation mechanism that keeps the metal in circulation within the formal economy. Pachchigar also issued a direct appeal to jewellers to halt bullion trading. "We appeal to all jewellers not to engage in bullion trading and not to sell bullion directly to customers... we request jewellers not to sell bullion above five grams." He said the advisory was issued immediately after the duty hike to align with the government's objective of curbing speculative demand. The association stressed that jewellery sales for ceremonies and essential purposes should continue, but non-essential bullion sales must be curtailed. "We request that jewellery sales continue only to the extent genuinely required by customers," Pachchigar said, while also highlighting the impact on employment. "Another important concern is employment, especially for small labourers and workers... whose livelihoods depend on the jewellery industry." He added that if the monetisation scheme and other proposals are adopted, "employment opportunities will also be protected." The move comes as small jewellers face mounting pressure from rising input costs and reduced demand, with IBJA pledging to bring gold stored in community funds to the market to prevent smaller businesses from shutting down. Pachchigar reiterated that the industry is committed to supporting the government at a critical time. "At this moment, we must stand with the government... we want to sit together with the government and find a practical solution." (ANI)
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