India’s silver exchange-traded funds (ETFs) are trading at high premiums over international prices due to strong festive demand and limited global supply. Investors have been snapping up silver in coins, bars, jewellery, and idols, pushing domestic prices above benchmarks.
Globally, silver ETFs recorded record inflows in the first half of 2025, adding around 95 million ounces. Total holdings reached roughly 1.13 billion ounces, worth over $40 billion. Rising industrial demand for solar panels, electric vehicles, electronics, 5G, and semiconductors has supported this surge.
Saudi Arabia’s central bank and other foreign buyers further boosted demand. In India, imports doubled in September as bullion dealers and jewellers tried to secure stock. The shortage caused ETF premiums of 5–12 percent over converted LBMA prices, including customs and GST, according to Axis Mutual Fund.
Axis MF cautioned that the inflated ETF prices may correct if supply normalises and domestic premiums fall. For medium- to long-term investors, silver remains a strategic hedge and portfolio diversifier. Short-term price gaps are less important for those holding silver over multiple years.
