Silver premiums over official domestic prices surged to $6.5 per ounce this week, or more than 10% above benchmark prices, compared with discounts of as much as $5.5 an ounce in May, dealers said.
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India’s restrictions on silver
imports have created shortages in the world’s biggest market for
the precious metal, pushing premiums to their highest levels in
six months despite weaker-than-usual demand.
Lower imports by India, which meets more than 80% of its
silver demand through overseas purchases, could weigh on global
prices, while helping narrow the country’s trade deficit
and ease pressure on its rupee currency.
“Silver imports have nearly come to a halt, creating a
shortage in the Indian market,” said Chirag Thakkar, chief
executive of Amrapali Group Gujarat, a leading silver importer.
“As a result, silver is trading at a significant premium to
global prices.”
Silver premiums over official domestic prices surged to $6.5 per ounce this week, or more than 10% above benchmark prices, compared with discounts of as much as $5.5 an ounce in May, dealers said.
IMPORT CURBS AIM TO EASE PRESSURE ON FOREX RESERVES
India in mid-May restricted imports of silver in nearly all
forms with immediate effect. In June, it further tightened the
rules by adding silver grain and powder to the restricted
category and requiring prior import authorisation.
Silver imports fell to 46.8 metric tons in May from 534.3
tons a year earlier, according to trade ministry data.
India’s silver imports fell further in June from May, said
Thakkar.
India has been trying in recent months to curb precious
metals imports to ease pressure on its foreign exchange reserves
and support the rupee.
As part of those efforts, the government has raised import
duties on gold and silver to 15% from 6%.
After India raised import duties in May, many investors
booked profits and exited silver exchange-traded funds (ETFs),
said a Mumbai-based bullion dealer with a private bank.
“That released metal into the domestic market, so there
wasn’t an immediate shortage despite the tighter import rules.
But now those supplies have dried up, and the market is feeling
the pinch,” the dealer said.
Silver demand in India comes from jewellery, coins, bars and
industrial applications such as solar panels and electronics. In
the past year, investment demand has surpassed traditional
consumption, driven by growing interest in silver ETFs.
At the moment, the market is largely dependent on supplies
from Hindustan Zinc, the country’s biggest silver
producer, said a Kolkata-based dealer.
“As demand continues to recover, which has already begun,
premiums are expected to move even higher,” he said.
India imports silver mainly from the United Arab Emirates,
Britain and China.
Published on July 8, 2026
