Tue, Jun 24, 2025
Slowly but steadily the demand for silver has risen in India, a country traditionally known for its obsession with gold.
While gold and silver, both are considered safe asset classes and the preferred metals for jewellery, the latter is also required for production of industrial items including solar panels, electronic devices and photovoltaic PV cells.
India’s demand for silver will rise further, and so will imports. Therefore, the geopolitical risks along with the fall in the overall value of the rupee in the recent months have policymakers worried. The Indian rupee, which was around 84 to the greenback a year ago, is now around 85.5, after almost touching 88 to the US dollar in February.
In March 2024, the price of silver was less than US$ 25 for an ounce. At present, it is more than US$ 33 per ounce. In India the price of the metal on Tuesday was over Rs 98,500 for a kilogram.
Apprehensions of an all-out trade war driven by reciprocal tariffs by the Donald Trump administration have pushed the price of gold and silver at a time when demand for the latter is up. Global recessionary trends will also push up the price of these precious metals.
According to experts tracking this area, India’s rush for silver will increase and prices are likely to remain elevated in the new financial year.
“Silver is now getting its own usage and gradually coming out of the gold-pegging order, which was the case until now but with the metal’s own usage increasing, the price could hold on its own in the new future,” an analyst said.
India along with the US, UK and Canada forms the top silver importing countries worldwide.
In 2023, India's total imports of silver stood at 3,625 metric tons. In 2024, the figure at about 7,669.40 was more than double of 2023.
Presenting the Union Budget in 2024-25, Finance Minister Nirmala Sitharaman brought down the customs duties on gold and silver to 6 per cent from 15 per cent. Despite this, prices in the domestic market have been going up.
Global Demand For Silver
According to the Silver Institute, the demand for silver globally has risen more than 35 per cent since the Covid outbreak in 2020.
CME Group's Open Markets noted that in an interview, Keith Neumeyer, CEO of First Majestic Silver, noted that strong uptake along with scarce supply has led to the metal's rally in the past year. Prices soared to a 12-year high of over US$ 34 an ounce in late October, though prices have largely remained around US$ 31 an ounce since then.
"We are in a four-year deficit of around 240 million ounces (annually) and it's climbing every single year,” Neumeyer said.
This is also pushing a large number of institutional investors to scramble for silver. Experts said that the trend could gain momentum in the near future.