aditya gadiyar

The real reason Modi wants you to stop buying gold My essay in @newslaundry @MnshaP Read. Share. Subscribe. Gold is not the story. Dollars are. That’s the real point behind Narendra Modi asking Indians to stop buying gold for a year. In my latest essay for Newslaundry, I argue that this appeal is really about India’s growing dollar problem, pressure on the rupee, and an economic stress that official narratives are still trying to underplay. India imports almost all the gold it consumes. It also imports nearly 90 percent of its crude oil, large quantities of natural gas, edible oil, fertilisers, electronics and industrial inputs. All of this has to be paid for in dollars, including more than $112 billion of trade deficit that we run with China. Now add a prolonged West Asia war, rising oil prices, a disrupted Strait of Hormuz, foreign investors pulling money out of Indian markets, slowing FDI inflows, slowing sales growth of IT companies and weaker remittance prospects. The result? Demand for dollars is surging at exactly the moment dollar inflows are becoming uncertain. That’s why the rupee is under pressure. That’s why the RBI is burning foreign exchange reserves defending the currency. And that’s why suddenly we are being told: Don’t buy gold. Avoid foreign holidays. Use public transport. Cut edible oil consumption. Carpool. Reduce fuel use. This is not random advice. It is an attempt to conserve dollars. The irony, of course, is that Indians buy gold precisely because they don’t fully trust the rupee, inflation management, or the long-term stability of the economy. Gold is not merely ornamentation in India. It is insurance, emergency savings, social security and psychological comfort rolled into one. The larger problem is that India’s economic model remains deeply import-dependent despite years of self-reliance rhetoric. We still depend heavily on imported energy, imported fertilisers and imported Chinese goods. And when the global environment turns hostile, that dependence shows up very quickly in the value of the rupee, inflation, subsidies, petrol prices, EMIs and fiscal deficits. The essay also explains why: 1) Petrol and diesel prices are likely to rise. 2) Inflation may stay elevated. 3) Interest rates and EMIs could go up. 4) Economic growth may slow. 5) The government’s fiscal math could worsen. 6) Moral suasion can only work for so long before economics overwhelms rhetoric. The government’s problem ultimately isn’t India’s love for gold. It is India’s dependence on dollars. newslaundry.com/2026/05/13/the…