“There is a ₹10,000 per kilo (kg) discount for bars prevailing in the physical market here,” said Surendra Mehta, national secretary India Bullion and Jewellers Association (IBJA), whose gold rates are used by the Reserve Bank of India (RBI) to redeem sovereign gold bonds.

Against a costing of ₹302,628 per kg, a bullion dealer was selling silver at ₹292,628 in the Mumbai market, Mehta said.

The most active silver futures contract on the MCX rose 5.5% to a record ₹3.03 lakh per kg as of press time, tracking gains in the international market, where prices climbed 5.3% amid tariff tensions between the US and NATO allies over Greenland’s sovereignty. However, the historic rally has tempered demand in India.

India imported 6,785 tonnes of silver in the calendar year through November 2025, against total demand of 7,040 tonnes over the same period, according to independent precious metals research consultancy Metals Focus.

“There is a slowdown in demand here which has resulted in a discount even as the prices have climbed to historic highs,” confirmed Chirag Sheth, principal consultant (South Asia) at Metals Focus. Sheth added that his firm’s silver outlook remained “bullish” as long as uncertainty around global tariffs persisted.

“The tariff wars have resulted in a dislocation in silver markets, and, unless clarity emerges, tightness in the metal would continue globally and sentiment will remain upbeat,” Shah explained.

Domestic silver prices, as tracked by the Nippon India Silver ETF, rose 5.66% to ₹284.70 per gram by 3:30 pm IST, taking year-to-date gains to 32.45% and returns over the past year to nearly 225%. By comparison, the benchmark Nifty index has delivered an absolute return of minus 2.15% year to date and 10.3% over the past year.

India’s silver demand is increasingly being channelled through silver ETFs, whose assets under management surged to ₹72,907.44 crore as of end-December 2025, from ₹15,339.21 crore as of 31 March 2025, according to Satish Dondapati, fund manager at Kotak Mutual Fund.