In the face of ongoing economic uncertainty, currency fluctuations, and the global transition to green energy, silver is gaining renewed traction among Indian investors. Traditionally viewed as the “poor cousin” of gold, silver is stepping into the spotlight—not just as a precious metal, but as a high-demand industrial commodity. With prices surging and Exchange-Traded Funds (ETFs) gaining popularity in India, silver could be a smart addition to investment portfolios in 2025.
The Current Landscape of Silver Investment
According to the Silver Institute, global silver demand is projected to exceed 1.2 billion ounces by 2025. This surge is driven by silver’s critical role in solar energy, electric vehicles (EVs), and industrial electronics. As of July 2025, silver is trading around $32.50 per ounce (approximately ₹2,700 per 10 grams), reflecting an 18% year-on-year increase. In India, prices have crossed the ₹90,000 per kg mark, marking a more than 20% rise year-on-year, outperforming many traditional investment instruments like fixed deposits and even short-term gold returns.
What’s Fueling Silver’s Rise?
1. Clean Energy Push
India’s ambitious renewable energy targets—aiming for 500 GW of non-fossil fuel capacity by 2030—will necessitate massive investments in solar infrastructure, where silver is a core material. Each solar panel utilizes 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
According to NITI Aayog estimates, India aims for 30% EV penetration in private vehicles by 2030. EVs utilize 2–3 times more silver than internal combustion vehicles, particularly in connectors and control systems. This shift will significantly elevate 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 against both 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 gaining traction. The total Assets Under Management (AUM) in Indian silver ETFs have grown over 70% year-on-year (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 movements.
Digital Silver: Offered by fintech platforms, this allows fractional ownership and ease of buying/selling, particularly appealing to younger investors.
Physical Silver: Coins, bars, and jewelry still hold cultural and emotional value—especially during festivals like Akshaya Tritiya and Dhanteras.
Potential Sovereign Silver Bonds: If introduced similarly to Sovereign Gold Bonds, these could offer attractive fixed returns alongside price appreciation and tax benefits.
Risks to Be Aware Of
While the fundamentals for silver investment look strong, it is inherently more volatile than gold. Key risks include:
Price swings due to global economic data or Federal Reserve policy changes.
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 initiatives, silver is poised to play a critical role—not just in industry but also in wealth creation. For Indian investors seeking alternatives beyond gold, stocks, and fixed deposits, silver offers an opportunity to participate in the next industrial and economic wave, with the added benefits of inflation protection and favorable global trends.
(The author, Inderbir Singh Jolly, is CEO at PL Wealth Management)
(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own and do not represent the views of the Economic Times.)
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