Mumbai, The Reserve Bank on Tuesday said that the growth in gold imports "decelerated substantially" in May, which had witnessed multiple appeals by Prime Minister Narendra Modi to reduce consumption of the precious metal.

"Growth in gold imports, however, has decelerated substantially in May 2026 compared to the preceding month," the RBI said in its bi-annual Financial Stability Report.

Gold imports stood at roughly USD 12 billion in May, marking the third consecutive month of decline, a graph presented by the central bank in the FSR showed.

Starting around May 10, with no certainty about an end to the West Asia crisis, which led to a steep increase in oil and commodity prices and put pressure on the rupee, with some fearing it would cross Rs 100 per dollar, Modi made multiple appeals to citizens to stop consuming gold.

The RBI report said gold imports had risen significantly in FY27, especially on the back of a steep increase in the price of the commodity.

It said petroleum and gold together contribute more than half of the trade deficit, underscoring the trade balance's vulnerability to external shocks.

The RBI said that an increase in precious metal prices is expected to cushion the fiscal arithmetic, which is going to come under pressure because of incomplete pass-through of elevated oil prices, excise duty cuts and the higher fertiliser subsidies.

In another welcome change, the RBI also noted that bets on gold exchange-traded funds, which had shot up by 190 per cent in FY26, have declined, pointing to a net outflow of Rs 725 crore in May as against a net inflow of Rs 24,039 crore in January.