The Indian government has imposed immediate restrictions on the import of certain silver products by shifting them from the “free” category to the “restricted” category. The move is aimed at reducing pressure on foreign exchange reserves and controlling rising bullion imports.
According to official notifications, the restrictions mainly apply to specific categories of high-purity silver bars and semi-manufactured silver products, which accounted for a major share of India’s silver imports over the past year.
Move Follows Recent Duty Hike
The latest restrictions come shortly after India increased import duties on gold and silver from 6% to 15%. The government introduced the higher tariffs to reduce overseas purchases of precious metals and manage the country’s trade deficit amid rising crude oil prices and global economic uncertainty.
Officials said increasing bullion imports have contributed to pressure on India’s foreign exchange reserves, especially as energy import costs remain elevated.
India Remains Largest Silver Consumer
India is currently the world’s largest silver consumer and depends heavily on imports to meet domestic demand. Silver is widely used across jewellery, coins, bars, solar panels, electronics, and industrial manufacturing sectors.
Reports said India’s silver imports reached record levels during FY26. In April 2026 alone, silver imports reportedly surged sharply compared to the previous year.
Investment Demand Behind Import Surge
Industry reports suggested that silver demand in India has increasingly shifted toward investment purposes rather than only traditional jewellery and silverware consumption.
Higher investor interest in silver bars, coins, and exchange-traded funds (ETFs) has contributed significantly to rising imports in recent months.
The government is believed to be targeting imports linked to investment demand while allowing regulated imports for industrial and manufacturing requirements.
Domestic Market May Face Supply Pressure
Bullion traders and jewellery industry representatives said the restrictions could tighten domestic silver supplies and potentially push local silver prices higher.
Trade bodies also raised concerns about possible disruptions for jewellers, artisans, and silver-based businesses, particularly in regions where silver jewellery and utensils remain a major part of local demand.
India imports most of its silver from countries including the UAE, the United Kingdom, and China.
Government Focuses On Import Control
The latest measures form part of broader efforts to manage India’s import bill and reduce pressure on the rupee amid global market volatility.
In recent weeks, the government has also appealed to citizens to reduce non-essential gold purchases as part of efforts to conserve foreign exchange reserves.
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