India’s top jeweler expects brief slowdown if gold buying curbed

Titan Co. Ltd., India’s largest jeweler, expects a temporary slowdown in demand if the government implements any measures to curb gold-buying, but is confident that domestic consumption will remain resilient in the long term.

Titan is trying to assess how demand for the precious metal in the world’s second-largest consumer will change after Prime Minister Narendra Modi urged Indians to forgo gold-buying to ease pressure on foreign reserves. The firm does not expect a disruption in supply for as long as four months, chief financial officer Ashok Sonthalia told Bloomberg TV.

“We are waiting for policy announcements,” he said. “A temporary, short-term slowdown may happen if the government decides to do something but we don’t expect demand to get destroyed in India.”

The comments reflect a broader sentiment gripping India’s gold industry in the wake of Modi’s unusual appeal this week, in which he also urged citizens to cut fuel use, limit foreign vacations and work remotely where possible, as rising energy prices due to the Middle East war risk inflating the country’s import bill. India imported more than 700 tons of gold last year.

Titan’s shares dropped as much as 2.2% on Tuesday, extending a 6% decline that was seen after the premier’s announcement.

The conflict has also impacted Titan’s operations in the Middle East, according to Sonthalia. The company has slowed down a planned expansion in the Gulf until the current situation improves. March and April were difficult in the regional market, but the medium- to long-term outlook remains positive, he said.

(By Satviki Sanjay and Preeti Soni)