A strategic request by Indian Prime Minister Narendra Modi to the people of the country not to purchase gold for at least one year can be seen in relation to a number of factors influencing the economy of India in view of the ongoing global energy crisis and increasing geopolitical threats in West Asia.

Primarily, India faces considerable strain on its foreign exchange reserves as the nation imports most of its gold as well as crude oil requirements. These need to be paid for using US dollars as the Indian currency is not recognized internationally in any other form. The increasing international prices for oil as a result of events such as the current Iran-US crisis have placed an unprecedentedly heavy burden on India’s import bill. By halting the import of gold which is luxury in nature, the government seeks to limit its expenditure of US dollars and ensure that its finances remain secure through these challenging times.