India restricts most silver imports to cut import bill, support rupee

The restriction is expected to reduce silver imports and tighten domestic supplies, potentially lifting premiums in the local market.

Lower demand from India, which meets more than 80% of its consumption through imports, could weigh on global prices.

India has placed imports of silver bars with 99.9% purity and all other ⁠semi-manufactured forms of silver under the restricted category with immediate effect, the order said.

The two categories accounted for more than 90% of the country's silver imports in the last fiscal year.

"This move will reduce imports and tighten supplies in the local market," said Chirag Thakkar, chief executive of Amrapali Group Gujarat, a leading silver importer.

"Silver had been trading at a discount after the government raised import duties, but it is likely to start trading at a premium in the coming weeks."

The South Asian country earlier this week raised import tariffs on gold and silver to 15% ‌from ⁠6% as part of efforts to reduce overseas purchases of the metals and ease pressure on foreign exchange reserves caused by higher oil prices.

India spent a record $12 billion on silver imports in the 2025/26 financial year ended March, compared with $4.8 billion a year earlier. In April, silver imports jumped 157% from a ⁠year earlier to $411 million, trade ministry data showed.

Silver is used in India for jewellery, coins, bars and industrial applications ranging from solar energy to electronics.

Over the past year, demand has been driven more by investment ⁠buying than traditional jewellery and silverware consumption, with inflows into silver ETFs climbing to a record high.

India imports silver mainly from the United Arab Emirates, Britain and China.

"It appears the government ⁠will allow limited silver imports for industrial use while discouraging imports for investment products in the short term," said a Mumbai-based bullion dealer with a private bank.