India has moved quickly to tighten its grip on silver imports. In a notification issued on May 16, the Directorate General of Foreign Trade shifted key categories of silver bars from the 'free' to the 'restricted' import regime, meaning importers now require prior government approval before bringing silver into the country. The move came into effect immediately and follows a series of steps the government has taken in recent weeks to reduce pressure on the rupee and the current account deficit.
What Exactly Has Changed for Silver Imports after DGFT Notification
Under the revised framework notified by the DGFT (Directorate General of Foreign Trade), importers will now require prior government approval to bring several categories of silver bars into India. The rules took immediate effect following the official notification issued on May 16.
India placed imports of silver bars with 99.9% purity and all other semi-manufactured forms of silver under the restricted category. The two categories together accounted for more than 90% of the country's silver imports in the last fiscal year.
This is a significant tightening. Until now, these categories could be imported freely without any special licence. Going forward, every shipment will need government clearance, which will slow the flow of silver into the country considerably.
What Led to the Need for Silver Import Restrictions?
The restriction does not stand alone. It is part of a broader policy response to a worsening external account situation. The government recently raised customs duties on gold and silver from 6% to 15% and restricted the amount of customs exemptions available to manufacturers.
Prime Minister Narendra Modi delivered a national address on May 10, urging citizens to refrain from buying gold and silver to support the national economy. As per Reuters, India's silver imports for the fiscal year 2025-26, which ended last March, jumped to a record high of $12 billion, compared to $4.8 billion last year.
The revised duty structure, combining a 10% basic customs duty with a 5% Agriculture Infrastructure and Development Cess, came into effect from midnight on May 13, triggering instant repricing across commodity and financial markets.
The rupee has been under severe pressure, having touched an all-time low of ₹96.33 against the dollar in recent sessions. With crude oil prices elevated above $110 per barrel and the current account deficit widening, the government is trying to reduce the outflow of foreign exchange on non-essential imports. Precious metals, given the scale of India's import dependence, are an obvious target.
What It Means For Silver Prices in India?
The immediate consequence of restricting supply is higher domestic prices. "This move will reduce imports and tighten supplies in the local market," said Chirag Thakkar, chief executive of Amrapali Group Gujarat, a leading silver importer. "Silver had been trading at a discount after the government raised import duties, but it is likely to start trading at a premium in the coming weeks."
On the Multi Commodity Exchange, on May 13, 2026, silver futures for July delivery climbed over ₹21000, or 7.5%, crossing the mark of ₹3,00,000 per kilogram following the duty hike. Spot gold in international markets remained largely unchanged at the time, confirming that the entire domestic price move was duty-driven rather than a reflection of global sentiment.
