Economy
Modi urges Indians to pause gold purchases to protect rupee
Prime Minister Narendra Modi is urging Indians to refrain from buying gold for a year to protect foreign exchange reserves, stoking fears that tariff hikes to curb imports of the metal may be in the offing, sending shares of jewelry retailers tumbling.
The Iran war has sent oil prices surging and that in turn has resulted in mounting pressure on India’s balance of payments and the rupee.
India is the world’s third-largest oil importer and consumer, meeting more than 90% of its crude oil needs and about half of its natural gas demand through imports.
Modi’s remarks about gold Sunday came in tandem with a range of other measures urged, including fuel conservation, increasing working from home and limits on travel and imports.
Gold is in high demand in India, particularly for weddings, with gold jewelry seen as a crucial part of a bride’s attire and a popular gift from family and friends. While it is the world’s second-largest gold consumer, India relies on imports to meet nearly all of its demand.
Shares of jewelry makers such as Titan, Senco Gold and Kalyan Jewellers fell between 6% and 8% Monday.
“There are concerns that the government might sharply increase import duty on gold for a year to discourage imports,” said Surendra Mehta, national secretary at the India Bullion and Jewellers Association. “Duties could be raised even higher than levels seen in recent years.”
In 2012 and 2013, New Delhi hiked tariffs on gold imports to stabilize a rapidly depreciating rupee. Now, jewelers fear that duty cuts made in 2024 to 6% from 15% to curb smuggling could soon be reversed.
A government source said Monday, however, that India has no plans to raise duties on gold and silver imports.
India’s balance of payments is expected to deteriorate sharply this fiscal year to a deficit of about $66 billion to $70 billion, compared with an estimated $26 billion to $28 billion in 2025-26.
Pressure on the rupee has prompted the central bank to sell the dollar and limit the size of trading positions that banks can take. It has also clamped down on arbitrage trades.
Retail sales in Türkiye climbed 21.2% on a yearly basis in March, official data showed on Monday, extending a momentum seen in recent months and indicating consumer demand remained strong despite regional tensions.
The sales volume advanced from a three-month low gain of 15.6% in the previous month, according to the data from the Turkish Statistical Institute (TurkStat). The retail sales have been relatively resilient in recent months.
Retail sales track consumer demand for finished goods and serve as a critical economic barometer.
On an annual basis, the figure marked the strongest growth since February 2024, as sales remained solid for both food, beverages, and tobacco, expanding at 7.3% compared to 6.4% in February, and non-food items excluding automotive fuel, which have risen 28.8% compared to 21.3% in the previous month.
Within the non-food category, sales growth accelerated the most for computers, books and communication devices at 49.2%, electrical appliances and furniture at 9.3%, textiles, clothing and footwear at 13.7% and medical products and cosmetics at 14.3%, respectively.
In contrast, sales via mail or internet eased to 20.7% from 25.4% in February.
Meanwhile, automotive fuel sales climbed 10.6% in March, up from 5.8% in the previous month.
On a seasonally adjusted monthly basis, retail sales increased 2.6% in March, rebounding from a 0.2% decline in February.
Overall trade sales, on the other hand, increased by 1.7% year-over-year and 1.9% on a monthly basis, according to TurkStat.
A separate report shared by the institute on Monday also showed that the total turnover index of the Turkish economy, including industry, construction, trade, and services sectors, surged by 34.6% on an annual basis in March.
Looking at the details of the index, the turnover in industry was up by 33.2%, construction increased by 22.0%, trade turnover rose by 35.9%, and services increased by 36.5% on an annual basis, respectively.
Türkiye achieved a record level of revenue last year from the use of its airspace within the scope of air navigation services, according to a report on Sunday.
The revenue stood at approximately TL 33 billion (around $727.7 million in current prices), according to data compiled by the Anadolu Agency (AA) from the 2025 Activity Report of the General Directorate of State Airports Authority (DHMI), which operates under the Ministry of Transport and Infrastructure.
Türkiye collects fees from airspace users for the use of facilities and services, in line with the rules of the European Organisation for the Safety of Air Navigation (Eurocontrol), of which it is a member.
Within this framework, Eurocontrol member states prepare a “cost base” for each fiscal year, which includes expenditures related to such services. This cost base consists of personnel costs, other current expenses, depreciation, and capital costs.
Airspace users are charged based on this cost for air navigation services. These costs represent the reimbursement amount for Türkiye’s air navigation service expenditures.
Service revenues increased by 53%
Within the scope of navigation services provided by Türkiye, approximately TL 33.05 billion in revenue was generated last year from airspace usage, marking a record. This represents a 53% increase compared to TL 21.59 billion recorded in 2024.
As a result, Türkiye ranked sixth among 42 Eurocontrol member countries in terms of the “national cost base size index” and second in terms of “airspace demand.”
Moreover, Türkiye maintained its position as the country providing the highest number of service units in European airspace during November and December last year and January this year, breaking its own record in monthly system service unit figures.
While the growth rate in observed service units across Eurocontrol members was 5.5% compared to the previous year, this rate reached 9.3% in Türkiye.
Accordingly, the total number of service units in the country reached approximately 21.87 million at the end of last year.
Türkiye achieved this record thanks to rising domestic demand, strong infrastructure, and human resources. The country’s geopolitical position and its role as an air traffic corridor on the East-West axis also contributed to its high level of service unit volume.
Türkiye stands out as the third-largest country in the global portfolio of International Finance Corporation (IFC), an arm of World Bank Group, a senior executive said on Sunday, detailing the institution’s priorities in the country.
International Finance Corporation’s Türkiye, Kazakhstan and Uzbekistan Director Lisa Kaestner said they are focusing on investments that can boost employment and raise productivity during a period of tightening liquidity conditions and rising volatility.
“IFC has invested more than $25 billion in Türkiye over the past 10 years. Türkiye stands out as the third-largest country in IFC’s global portfolio,” Kaestner told Anadolu Agency (AA).
Speaking to AA, she noted the country is strategically important for the World Bank Group, explaining that IFC’s priorities are shaped around a very concrete question: how private sector investments can support employment and competitiveness while also strengthening resilience.
Kaestner emphasized that, amid tighter liquidity and increased volatility, they are prioritizing investments that can create jobs, improve productivity, and accelerate the transition toward cleaner and more resilient value chains.
“Through our investments in manufacturing, logistics and value chains across the real sector, we support the competitiveness and growth of Turkish companies,” she explained.
“We help companies improve productivity, meet international standards, strengthen export capacity and shift toward higher value-added production that creates employment,” she added.
Moreover, Kaestner said IFC invested in Arçelik to support R&D, renewable energy and resource efficiency, and also financed Enerjisa to strengthen and modernize energy distribution infrastructure, including in regions affected by the earthquakes back in 2023.
Financial sector
In the financial sector, Kaestner said IFC works with private banks and non-bank financial institutions to provide longer-term financing to small and medium-sized enterprises (SMEs), exporters and entrepreneurs.
“At the same time, we contribute to the development of capital market instruments that broaden the investor base. For example, IFC invested $100 million in Iş Bank’s digital bond, the first digital bond issued by a private bank in an emerging market,” she noted.
“The funds were directed toward supporting SMEs recovering in the earthquake-hit region,” she furthered.
Kaestner also underscored that IFC’s investment priorities in Türkiye align directly with the World Bank Group’s employment-focused agenda, noting that micro, small and medium-sized enterprises (MSME) account for around 70.5% of employment in the country.
She said employment is largely an MSME story, but large-scale companies also make significant contributions.
“When leading employers grow, the employment impact extends beyond the company itself (as) suppliers, logistics firms and service providers also benefit from that growth. IFC’s role is to enable companies to invest, grow and create jobs at every stage.”
In practice, she explained, this means focusing not only on financing volumes but also on factors such as maturity, risk appetite and accessibility to financing, all of which determine whether job-creating investments can materialize.
These factors are especially critical in industrial modernization, clean energy, and large-scale logistics and infrastructure investments, where payback periods are longer.
Kaestner said that when companies gain access to longer-term and properly structured financing, they can invest in new equipment, skills and systems, compete more effectively, and sustain employment even during difficult conditions.
Mobilizing private capital
Kaestner said one of IFC’s key contributions in Türkiye is mobilizing private capital. She explained that IFC often acts as an anchor investor, helping build confidence in transactions and bringing together international creditors and investors through proper structuring and risk mitigation mechanisms.
This approach, she said, can include creating large-scale financing packages with commercial banks, supporting bond issuances and utilizing capital market instruments that broaden the investor base.
As an example, Kaestner noted that IFC mobilized private capital, with participation from commercial banks and asset managers, for a Eurobond issuance aimed at expanding Şişecam’s flat glass and solar glass production capacity, while also serving as an anchor investor in the issuance.
Kaestner emphasized that, for IFC, resilience means ensuring that investments continue and essential services operate uninterrupted even in volatile conditions.
“During periods when liquidity tightens and risk appetite declines, IFC steps in to support companies with strong fundamentals and priority investments through long-term, properly structured financing and risk-sharing,” she said.
“In addition to financing, our advisory and pre-investment work contributes to building a pipeline of bankable projects while supporting higher standards in environmental and social governance, corporate governance and inclusivity. In this way, we help ensure that private capital serves more resilient and sustainable growth.”
Queen Mathilde of Belgium is visiting Türkiye from May 10-14 as part of an “Economic Mission” alongside a high-level delegation aimed at boosting bilateral economic and commercial cooperation, according to Turkish Foreign Ministry sources.
The delegation accompanying the queen will include Belgian Deputy Prime Minister and Foreign Minister Maxime Prevot, Defense Minister Theo Francken, who is also responsible for foreign trade, Brussels-Capital Region Minister-President Boris Dillies, Flemish Region Minister-President Matthias Diependaele, Walloon Region Vice-President Pierre-Yves Jeholet, as well as 428 private sector representatives.
The visit is expected to demonstrate the shared willingness of both countries to further strengthen Türkiye-Belgium ties, which have recently gained momentum, particularly through the diversification of cooperation areas and the comprehensive expansion of economic and trade relations.
Within the framework of the mission, investment and business opportunities are expected to be explored in key sectors including energy, defense industry, aviation, logistics, health and life sciences, banking, technology and digitalization.
The program is also expected to include company visits, bilateral meetings and business-to-business (B2B) contacts between firms from the two countries.
The Türkiye-Belgium Economic Forum is also scheduled to be held during the visit, while intergovernmental agreements and documents in the fields of defense, aviation and social security are expected to be signed alongside agreements between private sector representatives.
The mission is also expected to highlight the achievements of the Turkish community in Belgium, which has become an integral part of Belgian society and contributes significantly to the country’s economic and social life.
Ministers participating in the delegation are expected to meet with their Turkish counterparts, while the delegation will also hold contacts with various public and private sector representatives in Istanbul and Ankara.
Türkiye-Belgium relations
Relations between Türkiye and Belgium, which have traditionally remained at a positive level, have gained further momentum in light of recent regional and global developments, with contacts aimed at closer cooperation increasing in recent years.
Talks between the two countries have focused on evaluating cooperation opportunities in areas expected to shape the future of bilateral ties, including economy and trade, defense, energy and connectivity, while also strengthening cooperation within NATO and the European Union in the face of common challenges.
The bilateral trade volume between Türkiye and Belgium reached $9.2 billion (TL 417.20 billion) in 2025, including $5 billion in Turkish exports and $4.2 billion in imports.
Belgian investments in Türkiye totaled $9.3 billion between 2002 and January 2026, while Turkish investments in Belgium amounted to $490 million during the same period.
Around 300,000 Turkish citizens living in Belgium serve as an important bridge between the two countries and make notable contributions to Belgium’s economic and social life.
‘New phase’ in ties
Commenting on the visit, Türkiye’s Ambassador to Brussels Görkem Barış Tantekin said on Saturday that the mission marks a new phase in bilateral relations.
“It can be said that this upcoming economic visit, taking place for the first time in 14 years, represents the beginning of a new phase under different conditions and within the framework of renewed relations,” Anadolu Agency (AA) quoted him as saying.
Tantekin noted that Belgium, as a founding member of the EU and a NATO ally, approaches its ties with Türkiye from a strategic perspective.
He added that the Belgian delegation will begin its visit with field visits to Turkish defense industry companies in Ankara and Istanbul, highlighting the importance of cooperation in this sector.
The mission will focus on strategic sectors, including energy, defense industries, space, aviation, as well as logistics and transportation, which Tantekin said are key to shaping future economic and geopolitical developments.
He said Türkiye’s priorities include advancing trade relations, building joint partnerships in third countries, and addressing broader issues such as updating the Customs Union with the EU and enhancing integration in value chains.
Tantekin also described the visit as a significant political opportunity to redefine relations with the EU and NATO within a broader strategic framework.
Belgium’s Economic Mission visits
Belgium’s “Economic Mission” visits, organized twice a year, are regarded as one of the country’s most significant economic diplomacy initiatives with a strong political dimension.
The missions typically feature a range of events centered on key sectors of bilateral economic relations with the host country and aim to promote concrete cooperation opportunities.
Belgium previously organized an Economic Mission visit to Türkiye in 2012. The mission at the time was led by King Philippe, then crown prince, while Queen Mathilde accompanied him as Princess Mathilde.
After suffering losses in his clothing business about a year and a half ago, Tariqul Islam turned to ride-sharing on his motorbike to make ends meet.
Until recently, he spent hours in fuel lines as supply disruptions linked to the war in Iran ripple through Bangladesh.
The 53-year-old father of four fears the strain will worsen if the war drags on, saying long hours waiting for fuel have sharply cut his income and made it increasingly difficult to support his family in Dhaka, the nation’s capital, including a daughter at university and a son in college.
“My family was managing fairly well through ride-sharing,” he said. “But after the fuel shortage began, I would buy fuel one day and run the bike for two days. As a result, I had to sit idle for one day, which reduced my income.”
Broader pressure, fuel crisis
The strain in Islam’s household reflects a broader squeeze in Bangladesh, heavily dependent on imported fuel, where energy shortages have disrupted daily life, slowed industrial output and raised concerns about economic growth as global tensions push up costs and strain supplies.
Conditions have eased slightly in recent days, with shorter queues at fuel stations after the government increased supplies, but concerns persist across sectors.
Across Asia, governments are facing similar strains as the war-driven surge in energy prices rattles economies dependent on imported oil and gas.
The continent is exposed because it relies on imported fuel, much of it passing through the Strait of Hormuz – a chokepoint for about a fifth of global oil and natural gas trade .
Higher fuel costs are leading to inflation and squeezing household budgets, while industries from manufacturing to transport are facing rising operating costs and supply disruptions.
The Asian Development Bank in late April cut growth forecasts for developing Asia and the Pacific, warning that war-driven energy disruptions would slow economies and fuel inflation. It now expects growth of 4.7% in 2026, with inflation rising to 5.2% as oil prices climb and financial conditions tighten.
Many are hoping for a quick end to the conflict and a return to normal.
“If this situation continues, we will have to move back to our village and find some other way to earn a living,” Islam, the struggling father said. It is not possible to survive in Dhaka by doing ride-sharing under these conditions.”
Rising energy prices are also expected to strain Bangladesh’s finances, with the government likely to spend an additional $1.07 billion on liquified natural gas (LNG) subsidies in the April-June quarter alone if global prices remain high.
Bangladesh has sought supplies from its big neighbor India, which has responded positively as it has diversified sources, including Russia, of fuel.
Already, authorities have imposed austerity measures to manage the crisis as global lenders warn of slower growth in the nation of more than 170 million people. Gas and diesel shortages have triggered more frequent power cuts in industrial zones.
The government has also shut fertilizer factories to divert gas to power plants, restricted evening hours for shopping malls and introduced fuel rationing.
The World Bank said in April it expects growth in Bangladesh to slow to 3.9% in the fiscal year ending in June 2026, warning that a prolonged Middle East conflict could fuel inflation, widen the current account deficit and strain public finances through higher energy subsidies.
Jean Pesme, the World Bank’s division director for Bangladesh and Bhutan, said the economy already faced “pre-existing vulnerabilities and challenges, in particular on the economic and employment front.”
The rising costs now are “obviously making the fiscal situation more difficult.”
He also warned that authorities should be cautious in raising fuel prices, saying higher costs could hurt farmers and agriculture.
The energy crunch is also driving up costs and threatening Bangladesh’s garment exports, the backbone of its economy, business leaders say.
Exports suffering
Anwar-Ul Alam Chowdhury, president of the Bangladesh Chamber of Industries, said exports to Europe and the U.S. could face a significant setback. Shipments have fallen between 5% and 13% in recent months, he said. He worries that customers could lose confidence in Bangladesh’s ability to deliver and that competitor nations such as India, Vietnam and Cambodia could gain market share if the crisis persists.
Chowdhury said factory output has dropped by 30% to 40% for various reasons and that the situation has worsened since the U.S. and Israel launched their war against Iran, while business costs have risen by about 35% to 40%.
Bangladesh, the world’s second-largest garment exporter after China, earns about $39 billion annually from the sector, which employs around 4 million workers, mostly women from rural areas.
Alvi Islam, director of Arrival Fashion Limited, said manufacturers are facing higher costs for petroleum-based materials such as sewing threads, poly bags and cartons, while spending more on diesel generators to cope with frequent power cuts.
His company, which exports products worth about $40 million annually, now runs generators at least four hours a day during production.
“For that reason, the cost of doing business for exporting garments has increased quite significantly in past one month,” he said.
Garment worker Mosammet Runa, 35, said she fears for her family’s future if the war continues.
“Millions of people like us depend on this industry. It is how we survive,” said Runa, who, along with her husband, earns about $400 a month to support their family of six.
She said a prolonged conflict could wipe out jobs and called for an end to the fighting.
“We are innocent people. The world should not make us victims,” she said.
The Gulf and the Strait of Hormuz will not be the same after the Middle East conflict ends, Türkiye’s trade chief said on Friday, as countries accelerate efforts to diversify strategic supply chains for energy and other critical goods.
The Iran war, unleashed on Feb. 28 by Israel and the United States against Iran, has caused the biggest energy supply disruption ever after triggering a blockade in the Strait of Hormuz, bottling up a fifth of global oil and gas supply.
“Countries will always consider alternative routes for their strategic supplies, vital energy sources, and other essential procurements, and will look to take action accordingly,” Turkish Trade Minister Ömer Bolat told an event in Istanbul.
He said the “single route” approach in global trade has come to an end, adding that Türkiye’s flexible logistics capacity enables it to adapt to different scenarios and secure flows.
Bolat said the consensus among analysts is that the Strait of Hormuz closure is having more destructive consequences for the global economy than previous crises.
He noted that around 25% of global oil, 20% of natural gas, and roughly one-third of fertilizer and petrochemical trade passed through the waterway before the war.
“As attacks on shipping began and Iran started using the strait as leverage, supply disruption fears suddenly increased and prices rose sharply,” Bolat said.
He said higher prices in oil, gas and fertilizers were feeding into global inflation pressures.
Bolat said global trade growth was already slowing, with world goods trade expected to expand by only 1.9% this year from 4.6% in 2025 under baseline estimates, and potentially as low as 1.4% under a pessimistic scenario, according to the World Trade Organization.
He said Türkiye had managed to avoid supply shortages despite global volatility, citing government measures and pre-emptive procurement strategies.
“There has been no supply shortage in fuel, electricity, natural gas, fertilizers or petrochemical products,” he said, adding that price increases reflected global market conditions rather than domestic shortages.
Disruptions cut exports to Gulf
Bolat said Türkiye’s exports to Gulf countries declined in March due to disruptions, falling by 35% to $1.5 billion, but noted that demand from other markets had increased as countries sought alternative suppliers.
“When those in Europe were unable to obtain products from the Far East or the Gulf, orders from there also began to increase,” he said.
Bolat said regional transport corridors were being reshaped, pointing to alternative routes through Iraq, Saudi Arabia and Jordan, as well as ongoing efforts under the Development Road Project.
“One thing is clear: the Gulf and Hormuz will not be the same as before,” he said.
Bolat recalled that the 10-year transit visa issue, which enabled Turkish truck drivers to pass through Saudi Arabia to the Gulf countries, has been resolved.
Since mid-April, transit routes have been operational both via Jordan and Saudi Arabia, and via Türkiye, Iraq and Saudi Arabia, he added.
He said Türkiye is implementing a multidimensional trade and transportation strategy through routes and projects, including the Zangezur Corridor, connecting Azerbaijan and Nakhchivan, the Development Road, the Middle Corridor, the Baku-Tbilisi-Kars Railway, the Habur and Syria transit lines, and new logistics routes linking the Gulf and Europe.
Bolat also highlighted Türkiye’s role in European trade, noting that annual total trade with the European Union stood at $233 billion, with exports slightly exceeding imports.
The bloc receives more than 40% of Türkiye’s exports. Türkiye is one of the EU’s key partners in sectors such as automotive.
Bolat added that Türkiye was the EU’s fifth-largest trading partner and one of the top three countries in the EU’s free trade agreement network.
“Therefore, Türkiye is just as important for the EU as the EU is for Türkiye,” he said.
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