India Restricts Silver Imports To Reduce Import Bill And Support Rupee

India has imposed immediate restrictions on imports of silver in most forms as part of efforts to curb overseas purchases and contain pressure on the rupee, according to a government notification issued on Saturday.

Invest in Indian Markets and Unlock Future Potential With 5paisa!

Open Account Now

The new rules place silver bars with 99.9% purity and several semi-manufactured silver products under the “restricted” import category. These segments accounted for more than 90% of India’s total silver imports during FY26, according to government data.

The decision follows the Centre’s move earlier this week to raise import duties on gold and silver to 15% from 6%. The measures come amid concerns over rising import costs and pressure on foreign exchange reserves linked to elevated crude oil prices.

Move Aimed At Supporting Rupee

India imports more than 80% of its silver requirement, making the country heavily dependent on overseas supply. A rise in imports increases demand for U.S. dollars which can put pressure on the rupee in the forex market.

By tightening silver imports, the government is attempting to reduce non-essential dollar outflows at a time when the rupee is facing pressure from higher crude oil prices and a stronger U.S. dollar globally.

India’s silver import bill rose sharply in FY26. The country imported silver worth $12 billion during the financial year ended March, compared with $4.8 billion in the previous year, according to trade ministry data.

Imports also remained elevated in April. Silver shipments increased 157% year-on-year to $411 million during the month, official figures showed.

Domestic Supply Could Tighten

Market participants indicated that the restrictions could reduce the availability of silver in the local market in the coming weeks.

Chirag Thakkar, chief executive of Amrapali Group Gujarat, stated that lower imports may tighten domestic supply conditions. He added that silver, which had been trading at a discount after the increase in import duties, could begin trading at a premium in local markets.

Silver is widely used in India for jewellery, silverware, coins and investment bars. Industrial demand also remains significant, particularly from sectors such as solar energy and electronics manufacturing.

Investment Demand Had Increased

Demand for silver in the past year was supported largely by investment buying rather than traditional jewellery consumption. Inflows into silver exchange-traded funds reached record levels during the period, according to market data. India mainly imports silver from the United Arab Emirates, Britain and China.

Bullion market participants indicated that the latest restrictions may still allow limited imports for industrial applications while discouraging imports linked to investment demand. The government notification, however, did not specify separate provisions for industrial users.