New Delhi, 23 July 2026: The direct impact of the new licensing system implemented by the Central Government in India is being seen on the precious metal silver market. Due to these strict rules, there has been a sharp decline in silver imports in the country, as a result of which the premium in the local market has reached the highest level in many months. According to Bloomberg report, most banks and financial institutions have not yet received the necessary permits or licenses to import silver and are waiting for government approval.
According to the report of consultancy firm ‘Metals Focus’, in order to save foreign exchange, the government had imposed compulsory licensing for the import of silver in May. Due to which, the shipment of silver to Gagdi in the month of June was only 29 tonnes, whereas in the month of January this figure was around 474 tonnes. This total import figure for the month of June is estimated to be less than 1 percent of the country’s annual silver demand.
Harshal Barot, Principal Consultant, Metals Focus, said that due to this sudden drop in supply, the 30-day average premium rate (ie, the additional amount paid by buyers over the benchmark prices) has reached the highest level since 2019. Renisha Chainani, Research Head of Mumbai-based gold trading firm ‘Ogmont Enterprise Limited’, said that due to stoppage of imports, a huge shortage of physical silver has been created, on the other hand the demand in the market remains unchanged.
Confusion among businessmen and government standards
According to a government official with knowledge of this entire matter, the committee approving import licenses meets only once or twice a month, due to which the process is getting delayed. The main objective behind this new arrangement is to prevent abnormal surge in silver imports from free-trade agreement countries like Thailand and United Arab Emirates (UAE).
However, the new licensing system has caused a lot of confusion among traders and importers. There is a lack of clarity regarding how the quota is allocated and what is the process after it is completed. Apart from this, the government has now made it mandatory to produce ‘Certificate of Origin’. According to the spokesperson of the Commerce Ministry, now the import of silver comes under the ‘Restricted Import’ category and all the applications are being processed as per the rules.
Clouds of danger over the upcoming festivals and wedding season
These strict measures have been taken at a time when earlier the government had increased the import duty on gold and silver significantly. These steps were taken keeping in mind the rising energy prices and pressure on the rupee due to the ongoing conflicts in West Asia.
But this shortage could become a big problem ahead of India’s busiest buying period in the coming days. Generally, jewelers start replenishing their stock from July itself for the festivals of October-November and the wedding season which runs from November to March. According to experts, if imports do not start on time, problems for consumers may increase in the coming days.
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