Silver Shortage in India: Rising Demand Quietly Outpaces Supply, Global Attention on China’s Gold Purchases

New Delhi: While the world keeps a close eye on China’s gold purchases, India is witnessing a quieter but significant development: a sharp rise in silver demand. The metal is increasingly disappearing from domestic markets, reflecting a combination of industrial needs and investors seeking a safe haven.

According to Chartered Accountant Nitin Kaushik, India’s growing appetite for silver goes beyond jewelry. The surge is driven by the solar energy sector, where silver is a critical component, as well as by ordinary savers who increasingly view silver as a reliable investment. He notes that while gold grabs headlines, silver quietly moves according to industrial demand, household habits, and long-term savings trends.

Silver Hits Record Levels

On Monday, silver prices crossed ₹3 lakh per kilogram in India. Experts highlight that India imported over 5,000 tonnes of silver in 2025, nearly a fifth of global annual production. This is not speculative trading but actual physical demand, signaling a real need for the metal.

Industrial and Investment Demand

Kaushik explains that silver’s role is no longer limited to ornaments or weddings. India’s push for solar energy has made it an industrial necessity. Large solar panel manufacturing units in western India use silver paste daily, and with domestic mining being limited, every expansion, factory line, or solar target leads to higher imports. Globally, solar energy alone consumes millions of ounces of silver annually, keeping demand steady even as prices rise.

At the same time, household investment patterns are shifting. With inflation concerns and a weak rupee during global shocks, cash is increasingly seen as insecure. Gold is expensive, while silver appears more affordable. Small bars, coins, and silver ETFs have quietly become a medium-class investment and safety tool, supported by physical silver held in global vaults. In 2025, silver ETFs in India alone attracted investments worth crores of rupees in a single month, reflecting genuine savings rather than speculative trading.

Supply Constraints Push Prices Higher

By mid-2025, global silver inventories had shrunk significantly, and domestic shortages became apparent. Spot prices in India occasionally traded at more than double international rates, with import duties unable to slow the pace. This indicates that demand is driven by necessity rather than speculation.

Kaushik notes that India’s long-term silver requirements will continue to grow, particularly with ambitious solar energy targets for 2030. Silver will compete with jewelry, investment, and industrial uses, and its prices are likely to remain volatile. Price jumps are driven by supply constraints, not media hype, with sudden spikes reflecting the real shortage in the market.

India’s Strategic Approach

While gold receives most media attention, silver quietly fulfills crucial industrial and investment roles. India is currently not chasing profit but ensuring necessary resources and security. Market trends reflect changing consumer behavior, and India’s approach to silver demonstrates a clear shift toward meeting both industrial and investment demand.