India’s precious metals import basket is undergoing a notable shift, with silver emerging as a key driver of import growth while gold demand shows signs of structural moderation in physical terms. Fresh data released by the Commerce Ministry on Monday indicates that silver imports have surged sharply in both value and volume during April–December 2025, even as gold imports recorded only marginal value growth despite a decline in quantities.

According to official data available on the Commerce Ministry portal, silver imports jumped 128.95% year-on-year to USD 7.77 billion in April–December 2025 from USD 3.39 billion in the same period last year. The rise was supported by a strong increase in physical shipments as well as higher international prices.

Import volumes climbed 56.07% to 5,727.07 thousand kilograms, compared with 369.48 thousand kilograms a year earlier. At the same time, the average unit price rose 46.69% to USD 1,356.98 per kilogram from USD 925.06 per kilogram. The simultaneous rise in price and quantity suggests robust underlying demand rather than speculative buying alone.

Silver’s growing prominence reflects its dual role as both an industrial metal and a store of value. Rising use in electronics, solar panels, electric vehicles, and jewellery fabrication has increased its strategic importance. In India, where silver jewellery consumption is widespread in rural markets, demand often remains resilient even when gold becomes expensive.

In contrast, gold imports presented a very different picture. Import value rose only 1.83% year-on-year to USD 49.39 billion during April–December 2025 from USD 48.51 billion a year earlier. However, this modest increase masked a significant contraction in physical demand.

Gold import volumes fell 18.29% to 522.38 thousand kilograms from 639.30 thousand kilograms. The decline occurred despite rising prices, indicating that higher costs are dampening consumption. Average import prices surged 24.62% to USD 94,554.33 per kilogram from USD 75,873.08 per kilogram.

This divergence underscores a broader shift in India’s gold consumption pattern from volume-driven purchases toward price-led value growth. Higher global bullion prices, elevated domestic retail prices, and changing investment alternatives appear to be discouraging physical buying.

Longer-term trends reinforce this structural change. Gold import value has risen sharply over the past six years—from USD 32.91 billion in FY19 to USD 58.01 billion in FY25, a 76% increase. However, physical imports have declined from 982.72 tonnes in FY19 to 757.10 tonnes in FY25, a drop of 23%. The data suggests that rising prices, rather than increasing consumption, are driving the higher import bill.

For FY26 so far (April–December), gold imports total USD 49.39 billion in value and 474.99 tonnes in quantity, continuing the pattern of price-driven trade dynamics.

The broader external trade picture adds another layer of concern. India’s combined merchandise and services exports rose 13.16% year-on-year to USD 80.45 billion in January 2026 from USD 71.09 billion in January 2025. However, imports grew even faster, increasing 18.77% to USD 90.83 billion from USD 76.48 billion.

As a result, the overall trade deficit widened sharply to USD 10.38 billion in January 2026, nearly double the USD 5.39 billion recorded a year earlier.

Precious metals imports have long been a major contributor to India’s trade deficit. Gold alone is typically the second-largest import category after crude oil. The surge in silver imports adds a new dimension, potentially worsening external balances if the trend persists.

From a macroeconomic perspective, a rising deficit can put pressure on the rupee, increase reliance on capital inflows, and complicate monetary policy decisions. High imports also reduce the benefit of strong export growth.

At the same time, the shift toward silver may reflect substitution effects. As gold becomes increasingly expensive, consumers and investors especially in rural and semi-urban areas - may be moving toward silver as a more affordable store of value.

Jewellery manufacturers and bullion dealers could see changing product mixes, with silver gaining prominence in both retail and export markets. Industrial demand linked to renewable energy and electronics manufacturing may also support sustained silver imports.

For financial markets, higher precious metals imports often correlate with currency volatility and inflation concerns. If global metal prices continue rising, India’s import bill could remain elevated even without strong volume growth.