Bengaluru: Silver’s plunge from a record high has failed to revive festive demand in India, as broader economic pressures and fears of further price drops keep consumers from buying. While demand for investment items like coins and bars has collapsed, consumer interest in jewellery continues to hold up.
The price slump comes as the government issued permits on 22 October for about 6,500 tonnes of silver imports over the next six months, equivalent to nearly 93% of the more than 7,000 tonnes imported in 2025. The approvals ease restrictions introduced in May, when the government required prior authorization for silver imports, and tightened in June to cover silver grain and powder. The government had also raised import duties on gold and silver from 6% to 15%, effective 13 May 2026 to curb precious-metal imports and ease pressure on foreign-exchange reserves.
The additional supply is expected to ease domestic shortages and premiums, even as demand remains weak. Silver futures on the Multi Commodity Exchange (MCX) fell 3.5% to ₹1,92,800 per kg on 23 October 2026, down nearly 55% from a record high of around ₹4.2 lakh per kg on 29 January 2026. A year ago, on 23 October 2025, MCX silver futures were trading at about ₹1.48 lakh per kg. The selloff has been driven by a stronger US dollar, elevated bond yields, expectations that US interest rates will remain higher for longer, and concerns about industrial demand.
Silver holds an important place in India’s festive buying, with households purchasing coins and idols for puja and auspicious gifting, alongside jewellery, utensils and decorative items. It is also seen as a more affordable alternative to gold, particularly when gold prices are elevated. On 29 October, 24-carat gold was priced at about ₹1.45 lakh per 10 g, up around 6.2% from ₹1.37 lakh at the start of 2026. However, sharp price swings in silver this year have complicated buying decisions, with consumers weighing festive purchases against the risk of further declines.
Surendra Mehta, national secretary of the India Bullion and Jewellers Association, said, “People are scared. Silver has gone down from ₹4.2 lakh to ₹1.9 lakh. When prices fall this sharply, people fear they could fall further. At the same time, equity markets are falling, oil prices are higher, and interest costs are rising. People simply don’t have the money to spend.”