Discretionary imports like gold and foreign travel drain reserves without adding value, Growthvine CEO Shubham Gupta notes, framing Prime Minister of India, Narendra Modi’s appeal as a strategic nudge rather than a sign of economic distress.
Prime Minister Modi’s recent call for Indians to cut back on gold purchases and foreign travel has sparked debate about whether the appeal reflects deeper economic stress or a tactical move to safeguard India’s fiscal health.
For Shubham Gupta, co‑founder and chief executive officer of Growthvine Capital, the message is clear: this is about protecting foreign reserves and steering household behavior toward more productive financial choices.
“I think it is more of a precautionary step rather than any sort of negative step,” Gupta said in an exclusive interview with Invezz.
“Imports can be divided into two categories: discretionary and essential. Crude and industrial imports are vital for the economy, while gold and foreign travel remittances are discretionary. The messaging is around stopping those foreign reserves from draining out and helping the economy in whatever way possible.”
Gold and travel in the crosshairs of fiscal discipline
India imported nearly $72 billion worth of gold in the last fiscal year, a figure Gupta believes could be trimmed significantly if households respond to the Prime Minister’s appeal.
“The best case would be if we are able to save 20% of it,” he noted, underscoring the potential impact on the rupee and the country’s import bill.
Gold has always been a traditional safeguard for Indian households, but a lot of the demand is purely speculative and does not add value to the economy.
Gupta also addressed concerns that the appeal might foreshadow higher fuel prices, given India’s dependence on imported crude.
Markets value certainty amid fuel price concerns
“Markets actually love certainty,” he explained.
“The markets will view it as a positive sign because it reduces uncertainty and overhang. It gives the signal that the government is responsibly managing its fiscal issues.”
While acknowledging that fuel price hikes are not sustainable in the long run, Gupta argued that clear signaling reassures investors and stabilises sentiment.
The broader impact, he suggested, will be felt across sectors most exposed to fuel costs.
“Aviation, logistics, and transportation will get hit the most. Then you have sectors like chemicals, paints, and industrial manufacturing where crude and freight are a large part of operating expenses,” Gupta said.
For households, higher fuel costs mean less disposable income, squeezing discretionary consumption.
“Companies with strong pricing power will steer through this better. Those unable to pass on costs will face margin pressure.”
Long-term push toward energy independence
Ultimately, Gupta sees Prime Minister Modi’s appeal as part of a longer‑term cycle aimed at stabilising the rupee and reducing imported inflation.
If we are spending less on gold imports and foreign travel, we are using fewer dollars. That helps the rupee. If the rupee is more stable, our import bill on crude does not increase. All of those things have a role to play.
For investors and households alike, Gupta’s advice is to stay disciplined.
“It boils down to tailoring your investments towards a goal and following asset allocation principles. If you do these two things perfectly, you will be able to steer through volatile periods very well.”
Below are edited excerpts from the interview:
Invezz:From an investment advisory perspective, how do you interpret Prime Minister Modi’s recent appeal to skip gold purchases? Is this a sign of deeper stress in the economy or a behavioral nudge to redirect savings?
Shubham Gupta: I see it more as a precautionary step rather than a negative one. We are in a period where gold often reflects fear-driven demand.
Gold is a product that deserves time and attention, but much of it is speculative and does not add value to the economy.
The government is signaling that we should conserve foreign reserves without hindering growth. Imports can be divided into two categories: discretionary and essential.
Crude and industrial imports are vital for the economy, while gold and foreign travel remittances are discretionary. The appeal is aimed at reducing the drain from these discretionary imports.
Invezz:Do you see this appeal as a move to protect foreign exchange reserves, and how much impact might it have on households?
Shubham Gupta: Gold has always been a traditional safeguard for Indian households. But signaling from the government can influence demand.
India imported close to $72 billion worth of gold last fiscal year. If even 20% of that can be reduced, it would be significant.
The appeal is essentially about protecting reserves, and households may gradually adjust their mindset in response.
Invezz:How should investors position themselves given speculation that fuel prices may rise in the coming weeks?
Shubham Gupta: Markets love certainty. If the government signals responsible fiscal management, investors may actually view this positively.
It reduces uncertainty and overhang. While fuel price hikes are not sustainable long term, clarity in policy helps markets absorb shocks better.
Over time, this kind of signaling reassures investors that fiscal issues are being managed responsibly.
Invezz:Do you expect subsidies or price controls to follow?
Shubham Gupta: Price controls are unlikely.
Expanding subsidies could be considered, but the government will probably focus more on fiscal discipline and targeted measures rather than blanket controls.
The emphasis will be on managing reserves and ensuring stability rather than distorting markets.
Invezz:If fuel prices rise, which sectors will be hit hardest?
Shubham Gupta: Aviation, logistics, and transportation will feel the direct impact.
Industries like chemicals, paints, and manufacturing — where crude and freight are major cost components — will also suffer.
For households, higher fuel costs reduce disposable income, hitting discretionary consumption.
Companies with strong pricing power will manage better; those without will face margin pressure.
Invezz:How might reduced gold and travel consumption affect inflation trends?
Shubham Gupta: Cutting gold and travel imports won’t directly lower inflation.
The impact is more indirect — by reducing dollar outflows, the rupee stabilises, which helps contain imported inflation, especially on crude.
If the rupee is more stable, our import bill doesn’t rise as much. It’s a long-term stabilizing effect rather than an immediate one.
Invezz:In this volatile geopolitical environment, how can advisory platforms like Growthvine help families navigate uncertainty?
Shubham Gupta: Two things matter most: goal-based investing and asset allocation.
If households align investments with long-term goals and diversify across asset classes, they can weather volatility.
Equities tend to recover from these shocks over time and deliver higher, while debt and gold provide stability.
The key is not being overexposed to one theme. Growthvine helps families tailor portfolios to their goals and educates them on disciplined investing.
Invezz:Which asset classes or sectors could perform well in the near-term?
Shubham Gupta: It’s difficult to predict short-term outcomes given geopolitical uncertainty.
If tensions ease, equities will benefit. If they worsen, safe-haven assets like debt and gold will outperform.
Balanced portfolios are the best way forward, ensuring resilience in both scenarios.
Invezz:Why have gold and silver prices fallen despite the Iran conflict as they are considered safe-haven assets?
Shubham Gupta: Much of last year’s demand was speculative rather than central bank-driven, creating a bubble. That unwound earlier this year.
During the conflict, investors often shifted to the dollar instead of gold, reversing last year’s de-dollarisation trend.
That explains the sharp correction.
Silver has industrial uses, so its movement is easier to understand, but gold’s fall was largely due to speculative unwinding and dollar strength.
Invezz: Do you see any silver lining in Prime Minister Modi’s appeal — could it accelerate India’s push toward renewables or domestic production?
Shubham Gupta: Absolutely. India has realised its vulnerability to external shocks, especially oil. Over the next 10–15 years, energy independence will be a major theme.
Renewables, nuclear energy, and domestic production will gain momentum.
This short-term pain could catalyse long-term structural change.
The government will likely accelerate efforts in domestic energy and broader industrial production, which has already been a theme in recent years.
We will see a lot of conversation around nuclear energy going forward as it is one of the cleanest sources and a long-term alternative to fossil fuels.
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