It’s A Silver Moment: White Metal Shines Bright Following RBI's Collateral Nod

Soaring prices and green-tech demand have sparked a silver rush in India, with old metal flooding markets. As silver gains loan-collateral status, analysts say that the white metal’s shine and strain will only intensify

Dec 09, 2025 · 4 min read

Silver, RBI, collateral, IBJA, India Bullion and Jewellers' Association, RBI, silver collateral

It is indeed a silver lining with a surge in demand for the metal. According to the India Bullion & Jewellers' Association (IBJA), about 100 tonnes of old silver were sold just last week, which is unusually high. Driven by the price hike, Indians are now rushing to sell the metal, which they have been sitting on for long. Typically, only about a tenth of it is sold in the domestic market every month.

In March 2024, the price of silver was around ₹77,000 per kg. Silver prices have touched their highest ever, with the precious metal priced at around ₹1.44 lakh per kg in 2025. As of Monday (December 8), 1g of silver costs ₹198.

Over generations, gold has ruled the hearts of Indians and the bank vaults. But silently, the trend has changed in the last few months. Silver, long considered an affordable precious metal, has also been seeing a major boom in demand not just in India but the world over.

As the global thrust shifts towards green energy, with solar panels and electric vehicles at the core, along with semiconductors, electronics, and nuclear power plants, the demand for this metal will continue to rise in the years to come.

The focus on growth and manufacturing will further boost demand for this precious metal.

But the industry is facing an acute shortage despite a reduction in import duty to 6%.

According to government statistics, India's domestic silver production is limited, and only about 800 tonnes per year is procured from mines operated by Hindustan Zinc and Hindalco.

On the demand side, of that 6,000-tonne annual demand, 35% goes to jewellery, 26% to investment, and about 20% to industrial use.

The need for silver for industrial use is expected to surge. Industry analysts said that the government must look into this and ensure that the supply remains intact, with a focus on the growth story.

Top Import Destinations

While China, the UAE, and Russia are among the top import destinations, India is now keen to expand sourcing silver from Moscow, where payments can be settled in local currencies.

"Diversifying import sources and entering long-term supply agreements with major producing countries can reduce vulnerability to sudden price spikes or logistical disruptions. Moreover, developing a strategic silver reserve, like existing metal stockpiles, would help smooth out demand surges and protect MSMEs from price shocks," Surendra Mehta, spokesperson, Indian Bullion and Jewellers' Association, told The Secretariat.

What Lies Ahead

With the Union Budget just a few weeks away, a balanced mix of recycling, strategic stockpiling, diversified sourcing, and predictable regulation can help the country manage silver demand sustainably.

Incentivising recycling can significantly reduce dependence on imports. Simultaneously, encouraging exploration and responsible mining can marginally enhance domestic production, though this is a longer-gestation solution.

A New Shine For Silver

The rise in silver prices has also ensured that the Reserve Bank of India has now allowed the metal to be accepted as collateral from April 1, 2026. As per the directive of the RBI, silver jewellery and coins can be used as collateral for loans.

Until now, only gold could be pledged for securing loans. Silver was left outside the formal financial system. This may sound like a small regulatory tweak, but this will further push prices for the white metal.

Industry experts believe that the RBI’s new rule could push prices even higher.

"The rule could mean that investors and households can now view the white metal as a long-term investment worth holding on to. Silver, which is critical for solar panels, electric vehicles, and the electronics industry, will now be under even more pressure," Mehta said.

A New Role In The Green Economy

Industrial demand is surging while the supply of silver remains tight. Moreover, silver is at the heart of the energy transition across the world. Industry experts pointed out that each solar panel contains about 20g of silver. And the industry isn't expecting a fall in demand for the white metal any time soon.

"EVs use up to twice that. As India and other major economies of the world expand their renewable-energy and EV manufacturing base, industrial demand for silver will soar," said a spokesperson of Simple Energy.

Tariff Effect

After the imposition of unprecedented trade tariffs by the Donald Trump administration, the prices of gold and silver have reached an all-time high. Global recessionary trends will also push up the price of these precious metals.

Experts feel that India’s rush for silver will increase, and prices are likely to remain elevated in the new financial year.

“Silver is now 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.