Festive Demand Drives Silver Premium to 10% in India Amid Global Price Volatility

The price of silver in India continued its sharp upward trend on Tuesday, with the precious metal trading at ₹1,882 per 10 grams (or ₹18,820 per 100 grams). This significant surge is primarily fueled by a spike in demand ahead of the crucial Diwali festive season, which has reportedly caused the domestic premium to jump to an astonishing 10% over global prices.

Key Drivers Behind India’s Silver Surge

India is recognized as the biggest market for silver globally, and the current domestic demand has created unique price pressure:

• Festive Season Demand: The exponential rise in demand for silver jewelry, coins, and utensils in the run-up to Diwali is the immediate catalyst for the price hike.
• Global Supply Constraints: The surge comes despite a dip in international prices, which Bloomberg reported as a 2.2% fall after silver touched an all-time high of over $53 an ounce in London.
• Supply-Demand Imbalance: Globally, demand for silver has outstripped supply for four consecutive years, erasing previous surpluses. Approximately 70% of silver is mined as a by-product of other metals, which naturally limits the ability of producers to quickly increase output in response to rising demand.
• Import Shortfall: Despite being the world’s largest consumer and relying on imports for over 80% of its demand, India’s imports have reportedly fallen by 42% over the first eight months of 2025. This shortfall has depleted the surplus imported in 2024, creating a supply shortage that must now be met by expensive extra overseas shipments.
• Global Factors: Supporting the upward trend are broader global economic factors, including the increased likelihood of US Federal Reserve rate cuts and the ongoing China-US trade war, both of which tend to boost safe-haven investment in precious metals like silver.

Silver Prices Across Major Indian Cities (Per 100 Grams)

As of October 14, the price of 100 grams of silver varied across major Indian metropolitan areas: