India, the world’s largest consumer of silver, has moved to tighten control over its silver imports by placing them under the “restricted” category until March 31, 2026. The decision comes after the government noticed a sharp rise in silver and plain silver jewellery imports from certain countries under preferential trade agreements, particularly from ASEAN nations like Thailand.
The move, announced through a notification by the Directorate General of Foreign Trade (DGFT), requires importers to now seek special authorization for silver imports—a measure aimed at curbing sudden surges, stabilizing domestic supply, and protecting the country’s vast jewellery sector.
As India enters its peak festive and wedding season, when demand for silver jewellery soars, the restriction has sparked mixed reactions from jewellers, bullion associations, and trade experts.
Why the Government Restricted Silver Imports
Silver has always been more than just a precious metal in India—it is intertwined with culture, tradition, and industry. Beyond its ceremonial use in jewellery and gifting, silver is also in growing demand for industrial applications, especially in solar energy, electronics, and medical technologies.
However, a recent “unusual surge” in imports, particularly from countries like Thailand, raised concerns within the government. Imports were reportedly entering India at lower duties under free trade agreements, threatening local refiners and jewellery manufacturers.
The DGFT notification placed imports of:
- Silver (unwrought, semi-manufactured, or in powder form)
- Plain silver jewellery (unstudded)
into the restricted category until March 2026. This means importers will now need specific approval from DGFT before shipments can be brought in.
Impact on India’s Jewellery Sector
The silver and jewellery industries form a vital part of India’s economy. According to the Gems and Jewellery Export Promotion Council (GJEPC), India exported gems and jewellery worth $37 billion in FY 2024–25, with silver jewellery playing a key role.
The restrictions are seen as a double-edged sword:
- Positive Impact:
- Domestic manufacturers and jewellers believe the move will protect homegrown artisans from being undercut by cheap imports.
- It may boost Make in India efforts by encouraging local production.
- Negative Impact:
- Importers and wholesalers fear delays and additional paperwork could disrupt supply during the high-demand festive season.
- Exporters worry that restricted access to raw silver may hamper jewellery exports at a time when the U.S. and European markets are already imposing higher tariffs.
U.S. Tariffs Add Pressure on Gem and Jewellery Industry
While the import restrictions aim to strengthen the domestic industry, the global environment has brought new challenges. The United States recently imposed tariffs on several Indian jewellery categories, including silver items.
The GJEPC has already appealed to the Indian government for urgent relief, warning that rising costs could dent export competitiveness. Surat, India’s jewellery hub, has been particularly vocal, given its reliance on silver processing and export markets.
If restrictions and tariffs converge, India’s jewellery sector could face a profit squeeze, forcing many exporters to rethink supply chains.
Rising Global Demand for Silver
The silver market is currently riding a wave of demand growth, not only for jewellery but also for industrial applications. Analysts at Reuters reported that India’s silver imports are likely to gain momentum in 2025 due to:
- Strong investment demand as silver remains a hedge against inflation.
- Industrial use, particularly in solar panels, batteries, and electronics.
- Cultural demand during India’s festivals and wedding seasons.
India imported more than 8,000 tonnes of silver in 2022, one of the highest levels ever recorded, and while volumes dipped slightly in 2023 due to global price volatility, 2025 is projected to see another surge.
This rising global appetite for silver makes India’s restrictions particularly significant for international suppliers.
Hallmarking and Quality Assurance in Silver
Parallel to import controls, the India Bullion and Jewellers Association (IBJA) has called on the Bureau of Indian Standards (BIS) to implement mandatory self-hallmarking of silver products.
This move would allow jewellers to hallmark silver items in-house, ensuring transparency and maintaining consumer trust. IBJA argues that while gold hallmarking has been standardized, silver remains inconsistent, leaving scope for impurities and malpractice.
The combination of hallmarking and import restrictions could reshape the industry, shifting focus toward quality-driven, domestically produced silver jewellery.
The Smuggling Challenge
Even as legal imports face restrictions, smuggling remains a growing problem. Recently, the Mumbai Directorate of Revenue Intelligence (DRI) seized smuggled gold and silver worth over ₹4.5 crore from a jeweller and his employee.
Officials warn that tighter restrictions could inadvertently fuel illegal trade, especially during high-demand months. Past experiences with gold import curbs suggest that when official channels tighten, the black market often fills the gap.
Festive and Wedding Season Demand
The timing of the government’s move has been particularly sensitive. The period between October and March is India’s peak demand season for silver jewellery, with Diwali, Dhanteras, and the wedding season driving bulk purchases.
Jewellers argue that sudden restrictions could push up prices for consumers. Retail silver jewellery prices have already risen nearly 10% year-on-year due to international price hikes, and any supply disruptions may add to inflationary pressures.
Expert Opinions
Economists, jewellers, and trade analysts have weighed in on the decision.
- Dr. Nisha Gupta, Trade Economist:
“While the intent is to protect domestic manufacturers, India must balance consumer demand, export competitiveness, and trade relations. Over-restriction could backfire.”- Rajesh Kalyanaraman, Jeweller in Chennai:
“Silver jewellery is affordable compared to gold and attracts middle-class buyers. Any price spike due to restrictions could dampen sales during the festive rush.”- IBJA President Prithviraj Kothari:
“We support steps to protect domestic jewellers, but self-hallmarking and ease of import approvals are equally necessary to avoid bottlenecks.”
Balancing Domestic and Global Pressures
The Indian government finds itself at a crossroads:
- On one hand, it must protect local artisans and small manufacturers from cheap imports.
- On the other, it needs to ensure sufficient raw silver for the export-driven jewellery sector.
- Added to this, U.S. tariffs and global price volatility have already put pressure on margins.
The DGFT is expected to streamline the approval process to ensure essential imports are not stalled, but industry insiders remain cautious.
The Road Ahead for India’s Silver Market
India’s move to restrict silver imports is part of a larger trend of self-reliance and supply chain control, echoing similar curbs on gold and electronic components in the past.
If implemented effectively, the restrictions could:
- Boost domestic silver refining and jewellery manufacturing.
- Encourage investments in value-added exports rather than raw silver imports.
- Promote greater quality control and hallmarking standards.
However, if not balanced carefully, the risk lies in smuggling, price hikes, and export slowdowns.
India’s decision to restrict silver and plain silver jewellery imports until March 31, 2026, marks a significant shift in trade and industry policy. While aimed at protecting domestic jewellers, the move comes at a time of rising global silver demand, increasing tariffs, and festive season pressures.
How India balances these competing interests will determine whether the restrictions succeed in strengthening the sector—or create fresh challenges for an already complex supply chain.
For now, the jewellery industry, consumers, and global silver traders are watching closely, as the outcome of this policy could shape the future of one of India’s most culturally and economically significant industries.
