What is the reason behind not buying gold for one year?

[Lokesh]

While addressing the nation, Narendra Modi advised against purchasing gold for at least a year. What are the reasons the Indian government is recommending a pause on gold purchases at this time?

[Siddarth]

We buy around 800 tonnes of gold every year but manufacture only 1/10 of it. And in the international market the value of the rupee is declining rapidly against the dollar ($1=96.31).

We import largely from Switzerland, the UAE, and South Africa. For investments, festivals, and jewelry, we require that much gold.

In the 2024-25 financial year, we bought roughly 757 tons of gold for $58 billion, and in 2025-26 till now, we have imported 721 tons of gold, but this time we have to pay more money, which is $71.98 billion (due to the lowered value of the rupee in the international market).

A reduction in the price of the rupee causes the government to spend more money buying gold, which will impact India’s foreign exchange reserves. That is why our Prime Minister encourages us to avoid buying gold for at least one year to help preserve our foreign exchange reserves.

[V_ihaan]

Does this mean that if we don't buy gold for the next few years, we will tackle the real reasons behind the rupee's drop, or are we just shifting the problem onto consumers and jewelers? Also, does the RBI have gold reserves outside of India?