Indian jewellers are bracing for a significant downturn in business following Prime Minister Narendra Modi's repeated appeals for citizens to curb non-essential gold purchases. The Confederation of All India Traders (CTI) warns that the country's annual gold consumption, typically around 700-800 tonnes, could plummet to as low as 500 tonnes.
This projected decline raises serious concerns across the jewellery industry, especially as the crucial wedding season, which traditionally drives a surge in gold sales, approaches in October and November. Many fear that consumers may delay purchases, either anticipating lower prices or interpreting the Prime Minister's message as a directive to abstain from buying gold altogether.
Impact on Small Jewellers and Artisans
The immediate impact is already being felt most acutely by smaller manufacturers, retailers, goldsmiths, and artisans. The CTI reports that since PM Modi's initial appeal in May, business for these smaller players has reportedly fallen by 60-70%. Amritsar, a major hub for gold ornament manufacturing, is witnessing a severe slowdown.
Retailers are reporting days without a single customer, leading to a halt in replenishing stocks. This prolonged weakness directly threatens the livelihoods of goldsmiths and artisans who depend on jewellery orders. There are growing concerns that small businesses may struggle to meet salary obligations or retain their workforce.
“People are not even buying a single ring or earring, expecting that prices may fall. Many retailers have not seen a single customer in the past 7-10 days and have stopped replenishing stocks,” jewellers said.
Wedding Season Woes
The timing of this appeal is particularly problematic for the industry. The wedding season, a period of heightened demand for gold jewellery, is just around the corner. CTI Chairman Brijesh Goyal noted that many families have already begun purchasing jewellery for upcoming weddings, and the current sentiment could lead to widespread postponements or cancellations of these significant purchases.
Should wedding and festive buying be significantly weaker than usual, the expected seasonal revival in Indian gold demand could be severely hampered, affecting the entire supply chain from bullion traders to retailers and artisans. The industry is now contemplating new strategies to navigate this challenging period.