India’s silver imports plunge to over three-year low in May, curbs and higher duties hit inflows

India’s silver imports slumped to their lowest level in more than three years in May after the government tightened restrictions on imports of the precious metal and raised duties, according to official data, reported Reuters.Imports fell 87% year-on-year to $75.57 million in May from $566.22 million a year earlier, data compiled by the Ministry of Commerce and Industry showed.In volume terms, silver imports dropped 94% from a year ago to 33 metric tonnes, the lowest level since February 2023.The sharp decline followed a series of measures aimed at curbing precious metal imports. In mid-May, India restricted imports of silver in nearly all forms with immediate effect. Earlier this month, the government further tightened the rules by bringing silver grain and powder under the restricted category and requiring prior import authorisation.India, the world’s largest consumer of silver, meets more than 80% of its demand through imports.Lower imports could weigh on global silver prices while helping narrow India’s trade deficit and ease pressure on the rupee, according to market participants.The government has also increased import duties on gold and silver to 15% from 6% as part of efforts to contain precious metal imports and reduce pressure on foreign exchange reserves amid elevated crude oil prices.“There is demand, but imports have become difficult due to the restrictions, and local premiums have started to rise,” a Mumbai-based dealer with a private bullion-importing bank told Reuters.India spent a record $12 billion on silver imports during the 2025-26 financial year ended March, compared with $4.8 billion in the previous year.Silver is used in India for jewellery, coins, bars and a range of industrial applications, including solar energy and electronics.Over the past year, demand has been driven largely by investment purchases rather than traditional jewellery and silverware consumption, with inflows into silver exchange-traded funds (ETFs) reaching a record high.India primarily imports silver from the United Arab Emirates, the United Kingdom and China.