India Tightens Silver Import Rules, Requiring Prior Approval for Granule and Powder Forms
Taylor Wilson
India has moved granules, powder, and other forms of 99.9%-pure silver into the restricted-import category, requiring prior licensing; last fiscal year's silver imports hit a record $12 billion, and authorities are plugging every channel to stem forex outflows.
What exactly did India restrict?
The government ordered on Tuesday that granules, powder, and other forms of 99.9%-pure silver now fall under restricted imports.
Importers must obtain a valid import authorization from the DGFT — the directorate that controls trade licensing — before purchasing.
This means → silver imports shift from "buy freely" to "get approval first," raising both lead times and uncertainty.
Why now? How fast were imports growing?
In the fiscal year ending March 2026, India spent $12 billion on silver imports — a record, up from $4.8 billion the prior year. That is a 1.5× jump in a single year.
In April alone, silver imports surged 157% year-on-year to $411 million, with no sign of slowing.
In plain terms = silver was draining India's forex reserves at an unsustainable pace, and the government hit the brakes.
What restrictions were already in place?
Last month, India placed 99.9%-pure silver bars and all semi-finished silver into the restricted category.
At the same time, import duties on gold and silver were raised from 6% to 15% — more than doubling.
This means → the granule-and-powder restriction is a gap-plugging move: bars first, then loose forms, systematically narrowing every high-purity silver import channel.
Why does India consume so much silver?
India is the world's largest silver consumer. Uses span jewelry, coins, bullion, and industrial applications in solar energy and electronics.
Over the past year, investment demand became the primary driver, with silver ETF inflows hitting record levels.
Major source countries are the UAE, the UK, and China.
How is the industry reacting?
A precious-metals trader at a Mumbai private bank said the government has made importing silver "significantly harder."
The core concern: there is no clarity on whether approvals will come through, or how long they will take.
This reflects a deeper problem — the licensing regime itself is not the biggest obstacle; the uncertainty is. Traders cannot predict delivery timelines, disrupting pricing and inventory management.
What is the bigger pressure behind this?
The macro backdrop: the Indian rupee is under pressure, with rising oil prices accelerating forex-reserve depletion.
Authorities are working on multiple fronts to ease the current-account deficit — the gap between what the country spends on imports and what it earns from exports.
Put simply = silver is just one leak being plugged. The real issue is that India's overall import bill is too large for its forex reserves to sustain.
Content is for reference only, not financial advice.