Key facts
- India's silver imports have fallen sharply due to new licensing requirements.
- Local silver premiums have reached a multi-month high.
- Most banks are awaiting government approval for import permits.
- Silver imports dropped 81.6% in May.
- Import duties on silver were increased to 15% from 6%.
- Silver is now classified under a "restricted" import category.
India's silver imports have experienced a significant decline, with an 81.6% drop in May, following the implementation of new licensing requirements and an increased import duty. The government raised the duty on silver from 6% to 15% and moved the metal to the "restricted" category, necessitating prior import authorisation from the Directorate General of Foreign Trade (DGFT).
This policy shift has disrupted shipments, leading to a sharp increase in local silver premiums to multi-month highs. Most banks are still awaiting government approval for the required import permits, with only a few having secured licenses. The measures were introduced after a record-breaking year for silver imports, which reached US$12.05 billion in FY2025-26, a substantial increase from US$4.83 billion in the previous year.
The government's actions aim to curb surging imports, manage foreign exchange outflows, and ease pressure on the rupee. The revised rules specifically cover imports of silver in grain, powder, unwrought, and semi-manufactured forms, as well as material containing 99.9% silver. These restrictions are expected to make trade flows more compliance-driven and potentially slower in the near term, impacting procurement planning for the bullion industry.