Prime Minister Narendra Modi's recent appeal for citizens to halt gold purchases has sparked significant debate regarding its feasibility and potential impact on India's economy. The move aims to address the country's foreign exchange outflow, which has been exacerbated by geopolitical tensions, particularly the Iran-US conflict. The All India Jewellers & Goldsmith Federation (AIJGF) has raised alarms, stating that this shift could jeopardize the livelihoods of 35 million individuals in the jewelry sector.

In response to these challenges, the Gold Monetisation Scheme, originally launched in 2015, is being revisited as a potential solution. The scheme's goal is to mobilize the 34,000 tonnes of idle gold held by Indian households, facilitating its productive use and reducing reliance on gold imports. However, it has struggled to attract participation, garnering only 39 tonnes of gold deposits to date.

The Gold Deposit Scheme allows consumers to deposit gold at certified centers and earn interest, while the Gold Metal Loan Scheme enables banks to lend gold to jewelers. With India's gold imports rising by 24% in FY26, costing about $72 billion in foreign exchange, industry stakeholders are advocating for the government to strengthen the Gold Monetisation Scheme to balance economic needs with the livelihoods of millions.