Summary:
India faces a tight silver supply, with jewellers in Mumbai halting fresh orders due to a severe physical shortage, even as global demand continues to rise. Despite a small price correction locally, analysts anticipate sustained upward pressure on silver prices driven by industrial demand, structural deficits, and growing investment interest, including a surge in Indian silver ETFs.
Local Market Disruption
Jewellers in Mumbai’s Zaveri Bazar, the hub of India’s silver trade, have temporarily stopped accepting new orders, citing a significant shortage of physical silver. On October 15, 2025, silver prices fell by ₹2,000 per kg to ₹1.74 lakh per kg, yet supply constraints continue to limit availability for fresh demand.
The shortage is further compounded by supply disruptions in countries such as Australia, Turkey, and China, which have tightened global supply chains, impacting availability in India.
Global Supply and Demand Trends
Silver prices reached a 14-year high of $51.30 per ounce in October 2025, registering 70% year-to-date gains. The bullish trend is backed by strong fundamental drivers:
- Industrial Consumption: Now accounts for 59% of global silver usage, with applications in solar energy, electronics, and electric vehicles.
- Structural Supply Deficit: Global silver supply stands at 31,000 tonnes, whereas demand exceeds 35,700 tonnes, resulting in a shortfall of ~3,655 tonnes (118 million ounces).
- Solar PV Demand: Silver usage in solar panels exceeds 200 million ounces annually, expected to rise to 450 million ounces by 2030.
This combination of robust industrial demand and persistent supply constraints is keeping global prices elevated, despite minor local price corrections.
Investment Surge in India
Investors are increasingly turning to silver as an alternative asset:
- Silver ETFs in India surged 69% year-to-date in 2025, reflecting growing investor appetite.
- Monthly inflows in August rose 180%, highlighting participation from both retail and institutional investors.
This trend indicates that India’s silver market is not only affected by industrial demand but also by rising investment interest, which is likely to support prices in the medium to long term.
Outlook
Analysts expect short-term price corrections in India due to minor fluctuations in local demand or inventory adjustments. However, long-term pressure on silver prices remains intact, fueled by:
- Ongoing industrial consumption
- Structural supply deficits
- Growing interest from institutional and retail investors
As India continues to rely on imports to meet its silver demand, the market is likely to remain tight and competitive, with premiums on physical silver persisting in the near term.
Disclaimer:
This article is intended solely for educational and informational purposes. The securities or companies mentioned are provided as examples and should not be considered as recommendations. Nothing contained herein constitutes personal financial advice or investment recommendations. Readers are advised to conduct their own research and consult a qualified financial advisor before making any investment decisions.
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