According to the Silver Institute, global silver demand is projected to exceed 1.2 billion ounces in 2025, driven by its critical role in solar energy, electric vehicles (EVs), and industrial electronics. Globally, silver is trading around $32.50/oz (₹2,700 per 10 grams) as of July 2025, up 18% YoY. In India, prices have crossed the ₹90,000 per kg mark—an increase of over 20% year-on-year, outperforming many traditional investment instruments like FDs and even short-term gold returns.
What’s fueling silver’s rise?
1. Clean energy pushIndia’s ambitious renewable energy targets—500 GW of non-fossil fuel capacity by 2030—will require massive investments in solar infrastructure, where silver is a core material. Each solar panel uses 15–20 grams of silver, and demand is expected to grow in tandem with the government’s Production Linked Incentive (PLI) schemes in renewables and semiconductors.
2. EV adoption in India
As per NITI Aayog estimates, India aims for 30% EV penetration in private vehicles by 2030. EVs use 2–3x more silver than internal combustion vehicles, particularly in connectors and control systems. This will significantly raise domestic industrial silver consumption.
3. A hedge against inflation and Rupee weakness
With domestic inflation averaging above 5%, and the rupee hovering near ₹84/USD, silver offers a hedge both against purchasing power erosion and currency depreciation. Unlike gold, silver also benefits from industrial utility, providing dual upside potential.
4. Limited domestic supply
India imports over 60% of its silver requirements, making it highly sensitive to global supply-demand shifts. With mining output stagnant globally and industrial demand booming, prices are expected to remain firm or trend upward over the medium term.
Investment Avenues for Indians:
Indian investors now have multiple regulated and accessible ways to invest in silver:
Silver ETFs: Introduced in 2022, these are seeing growing traction. The total Assets Under Management (AUM) in Indian silver ETFs have grown over 70% YoY (AMFI, Q2 2025).
Silver futures: MCX Silver and Silver Mini contracts offer high liquidity. Trading volumes have risen by 35% in the past year, reflecting investor interest in short- to medium-term silver price movement.
Digital silver: Offered by fintech platforms, allows fractional ownership and ease of buying/selling, particularly for younger investors.
Physical silver: Coins, bars, and jewellery still hold cultural and emotional value—especially during Akshaya Tritiya, Dhanteras, and weddings.
Potential Sovereign Silver Bonds: If introduced on the lines of Sovereign Gold Bonds (SGBs), they could offer an attractive fixed return alongside price appreciation and tax benefits.
Risks to Be Aware Of:
While the fundamentals look strong, silver is inherently more volatile than gold. Key risks include:
- Price swings due to global economic data or Fed policy
- Geopolitical tensions affecting imports
- Speculative trading in futures markets
Investors are advised to keep silver as part of a diversified portfolio—ideally 5–10%, depending on risk appetite and time horizon.
Conclusion:
As India accelerates its clean energy and EV push, silver is set to play a critical role—not just in industry, but in wealth creation. For Indian investors seeking alternatives beyond gold, stocks, and FDs, silver offers an opportunity to participate in the next industrial and economic wave—with the added shine of inflation protection and global tailwinds.
(The author, Inderbir Singh Jolly is CEO at PL Wealth Management)
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)
