A decline in Indian demand — with the country relying on imports for over 80% of its silver consumption — may also put pressure on global silver prices.
On Friday, silver prices witnessed a sharp decline in both domestic and international markets.
Selling pressure deepened in the bullion market, dragging MCX silver prices down by ₹11,644, or 4%, to ₹2,79,458 per kg.
How's import restrictions likely to impact silver prices?
How's silver likely to trade in upcoming sessions?
Silver rate today: The central government has imposed immediate restrictions on imports of silver in almost all forms, according to a government notification issued on Saturday, as the world’s largest consumer of the metal looks to curb inflows and reduce pressure on the rupee.
The move is likely to lower silver imports and tighten domestic availability, which could push up premiums in the local market, according to market experts.
A decline in Indian demand — with the country relying on imports for over 80% of its silver consumption — may also put pressure on global silver prices.
Under the new directive, imports of 99.9% purity silver bars, along with all other semi-finished silver products, have been moved to the restricted category with immediate effect.
On Friday, silver prices witnessed a sharp decline in both domestic and international markets. Selling pressure deepened in the bullion market, dragging MCX silver prices down by ₹11,644, or 4%, to ₹2,79,458 per kg. Meanwhile, spot silver fell 3.1% to $80.93 per ounce.
How's import restrictions likely to impact silver prices? According to Jateen Trivedi, VP Research Analyst - Commodity and Currency, LKP Securities, the silver import restriction doesn’t mean India has shut the door, it means the entry is now guarded. Supply isn’t stopping, it’s being channeled only through nominated agencies like RBI banks, DGFT-approved entities, jewellers via the bullion exchange.
Trivedi explained that for the domestic market, that almost always translates into higher premiums. The MCX-LBMA spread is the number to watch, because that gap shows you exactly how much extra Indians are paying versus the world price.
He further added that the impact on spot silver should be muted. India is a large consumer but not a price setter for global benchmarks.
Trivedi believes that consumers will see higher domestic prices of the bullion. “What could shift is physical trade flow. If demand gets rerouted through routes like the UAE CEPA TRQ, you’ll see regional premiums in Dubai or Hong Kong adjust. Listed refiners and ETF pricing in India will also reflect the tightness, because they become the easiest access point when physical supply is gated,” he said.
How's silver likely to trade in upcoming sessions? On the other hand, Anuj Gupta, SEBI Registered Research Analyst, said that Silver prices are expected to strengthen in the domestic market, while remaining firm in the international market as well.
“Demand for the white metal in India could soften following the announcement of the import ban. Since India is one of the world’s largest consumers of gold and silver, the restriction may weigh on overall domestic demand for silver going forward,” Gupta said.
On the silver prices technical outlook, Ponmudi R, CEO of Enrich Money, said that MCX Silver futures are trading near the ₹2,70,000– ₹2,72,000 zone after witnessing sharp profit booking from recent highs near ₹3,05,000.
“Immediate resistance is seen near ₹2,80,000– ₹2,84,000, followed by ₹2,90,000– ₹2,95,000. A sustained breakout above these levels could push prices toward the ₹3,00,000– ₹3,05,000 region. On the downside, ₹2,65,000– ₹2,60,000 acts as immediate support, with stronger support placed near ₹2,50,000. Overall, the broader trend remains constructive, though near-term momentum continues to reflect corrective weakness unless key resistance zones are reclaimed decisively,” he added.
