Driven by the Iran conflict pushing international oil prices higher, India, the world's third-largest oil importer, is facing severe external payment pressures. To mitigate the risks of rupee depreciation and foreign exchange reserve depletion, Prime Minister Narendra Modi publicly appealed on Sunday for citizens to avoid buying gold over the next year. This call is part of a series of measures including fuel conservation, increased remote work, and travel restrictions. This statement immediately sparked market concerns over potential increases in gold import tariffs, leading to a sharp collective decline in Indian jeweler stocks on Monday. Jewelry stocks fell over 6% in a single day, with the tariff anxiety spreading to major Indian jewelry manufacturers such as Titan, Senco Gold, and Kalyan Jewellers, whose shares dropped between 6% and 9%. The market fears the government may be compelled by balance of payments pressures to reinstate higher gold import tariffs to curb demand. Surendra Mehta, National Secretary of the India Bullion and Jewellers Association, stated, "The market is concerned the government may significantly raise and maintain gold import tariffs for a year to suppress imports. Tariffs could even be increased to levels higher than recent years." Notably, this is not the first time India has utilized gold tariff tools. In 2012 and 2013, to counter rapid rupee depreciation, New Delhi twice increased gold import tariffs, which at one point reached a high of 15%. These were only reduced to 6% in 2024 to combat rampant smuggling. The jewelry industry now worries this tax reduction could be swiftly reversed. However, a government source indicated on Monday that India currently has no plans to raise import tariffs on gold and silver. This statement temporarily eased some panic, but market doubts have not fully dissipated. India relies on imports for over 90% of its crude oil needs and approximately 50% of its natural gas demand. Following the outbreak of the Iran conflict, Brent crude prices have surged significantly, directly impacting India's trade balance. The current fiscal year's balance of payments deficit is projected to widen sharply to approximately $66-70 billion, compared to a deficit of only about $26-28 billion in the previous fiscal year. Amid high oil prices, India's state-run fuel retailers have long been unable to raise retail prices. Since April 2022, petrol and diesel prices have remained unchanged, leading retailers to incur massive losses: currently, losses are about 100 rupees (approximately $1.05) per liter for diesel and 20 rupees per liter for petrol. Although senior government officials stated on Monday that domestic fuel supplies are adequate, the pricing distortion at the retail level has become unsustainable. The rupee exchange rate is under immense pressure. On Monday, the Indian rupee closed at a historic low of 95.31 against the U.S. dollar. The Reserve Bank of India has been forced to sell dollars to intervene in the market, while also limiting the trading position sizes banks can hold and intensifying crackdowns on arbitrage trades. It is noteworthy that India is the world's second-largest gold consumer, where gold holds an irreplaceable position in wedding culture—gold jewelry is considered an essential part of a bride's trousseau and a popular gift among relatives and friends. However, India produces very little gold domestically, with almost all demand met through imports. Therefore, any tariff increase dynamics would directly transmit to end-user prices, significantly impacting the jewelry industry and consumers.