India's jewellery trade is facing growing concerns over weak gold demand, with traders warning that annual gold consumption could fall sharply if the situation does not improve. The Chamber of Trade and Industry (CTI) has now urged the central government to step in and provide support to the industry.
Brijesh Goyal, president of the CTI, has written to Prime Minister Narendra Modi seeking immediate measures to protect traders, goldsmiths, artisans and others associated with the jewellery sector. The letter comes amid concerns that consumer demand for gold has weakened following the Prime Minister's appeal to people to avoid buying gold.
Traders fear gold consumption could fall
According to the CTI, India's annual gold consumption could decline from around 800 tonnes to nearly 500 tonnes if the current situation continues. Such a drop could put significant pressure on jewellery retailers, small goldsmiths, artisans and other businesses dependent on the sector.
The organization has therefore asked the government to consider a special economic package worth ₹10,000 crore. The proposed package is aimed particularly at small-scale artisans, goldsmiths and gold traders who could be among the worst affected by falling demand.
Five demands placed before the government
The CTI has reportedly submitted five key demands to the Prime Minister. One of its major requests is the announcement of a dedicated relief package for businesses and workers associated with the gold trade.
The organization has also requested an opportunity to meet PM Modi. A delegation of representatives from the jewellery and gold trade wants to explain the industry's concerns directly and discuss possible measures to protect employment and businesses.
Why are traders worried?
The jewellery industry is particularly sensitive to changes in consumer demand because gold purchases are closely linked to weddings, festivals and other important occasions.
Traders are concerned that if consumers postpone jewellery purchases, retailers could see a substantial decline in sales. Small goldsmiths and artisans could face additional pressure because their businesses depend heavily on regular orders from jewellery shops and customers.
The CTI has therefore argued that timely government intervention is necessary to prevent the situation from affecting employment across the sector.
PM Modi had appealed to people to avoid gold purchases
The traders' concerns follow an appeal reportedly made by Prime Minister Narendra Modi during a public rally in Hyderabad on May 10. He urged citizens to avoid purchasing gold for a year as part of a broader appeal to promote economic self-reliance.
During the same appeal, people were encouraged to give greater preference to indigenous products and reduce their dependence on petrol and diesel.
While the broader objective was linked to strengthening the domestic economy, representatives of the jewellery industry say that reduced gold purchases could have a direct impact on their businesses.
Wedding season adds to the concern
The timing has also become an important issue for traders. India's jewellery demand traditionally receives a boost during wedding and festive periods.
According to the CTI, encouraging consumers to postpone gold purchases during such a period could put additional pressure on jewellery businesses. Traders fear that prolonged weakness in demand could affect not only large retailers but also thousands of small businesses and artisans working across the country.
The organization has therefore asked the government to consider financial assistance and other measures to protect the sector.
What happens next?
The government's response to the demands will determine whether any relief measures are introduced for the jewellery industry. For now, traders are seeking direct discussions with the government and a special financial package to cushion the impact of declining gold demand.
If gold consumption does fall significantly, the effects could extend beyond jewellery shops to goldsmiths, artisans, manufacturers and other businesses that depend on India's large gold market.
