Silver imports surge at India’s bullion exchange after new licensing rules

The surge follows a May decision by the Directorate General of Foreign Trade (DGFT) to move certain categories of silver to the restricted list, requiring importers to obtain authority's licences. As licences began to be issued, importers turned to IIBX to source the metal, with industry estimates suggesting that approvals covering about 400 tonnes of silver had been granted by mid-August, and some may have been approved after that.

“As licences began to flow, imports followed. Industry estimates suggest around 400 tonnes of licences were approved by mid-August,” said Anindya Banerjee, head of commodity and currency research at Kotak Neo. The 400 tonnes refers to the quantity of silver that could be imported under the approved licences, not the volume already imported.

India imported 1,017 metric tonnes of silver in the current fiscal year through September, according to Department of Commerce data. Of this, 283 metric tonnes, or about 27%, came through IIBX. Silver prices have fallen 11.7% since August to ₹1.92 lakh per kilogram.

“If a nominated bank has a 200 kg quota, and one client asks for the full 200 kg while 20 others ask for 10 kg each, the bank will typically give the entire amount to the first buyer,” said an industry official, who asked not to be named. “The exchange model solves this allocation issue, which is why so many importers are switching to IIBX,” the person added.

The government’s move to restrict certain categories of silver imports was aimed at curbing non-essential imports and easing pressure on the rupee, the official said. It also sought to prevent importers from exploiting a duty differential that had emerged following changes in import duties.

In May, the Centre raised the import duty on silver to 15% to curb imports. However, the India-UAE trade agreement allowed eligible importers to bring in silver at lower duty rates, creating an incentive to source the metal through the UAE. Moving certain silver categories to the restricted list made imports subject to government licensing, giving authorities greater control over the flow of silver into the country.

Second growth engine

IIBX, launched as India’s first exchange through which eligible jewellers and other buyers can directly import bullion, was expected to build its business around gold. However, a legal dispute over the allocation of quotas for importing gold at lower customs duty rates, which began in early 2025, has disrupted gold imports through the exchange. Gold and silver imports into India have traditionally been routed primarily through nominated banks.

IIBX expects silver to become a more significant part of its business. “We are hopeful of recording silver trading volumes of over 2,000 tonnes in the current financial year, subject to the availability of import licences issued by the DGFT,” said Ashok Gautam, managing director and chief executive officer of IIBX.

“We see silver becoming IIBX’s second growth engine. The exchange has already handled silver at scale, with about 1,127 tonnes in calendar 2024, roughly 16% of India’s silver imports. The market is large, with India’s silver import bill at a record $12 billion in FY26,” Banerjee said.

Sustainability

For the exchange to sustain those volumes, however, it may need to attract importers even when they can use banks and other permitted channels, according to experts.

“Traditionally, bullion imports have been concentrated among a relatively small group of banks and intermediaries. Allowing a wider range of eligible participants to import directly from the exchange can improve competition, reduce intermediary premiums and potentially deliver better pricing to end consumers,” said Hiren Chandaria, managing director for the Middle East and Asia at Monetary Metals.

Some industry participants argue that regulation could help secure a more durable flow of business for IIBX by requiring a portion of imports under each licence to be routed through the exchange.

“The DGFT could specify that a certain percentage of imports under each licence must be routed through IIBX. Suppose an importer receives a licence to import 50 tonnes of silver. The DGFT could stipulate that 10 tonnes must be imported through IIBX, while the remaining 40 tonnes could be sourced through other permitted channels like banks,” another official said.

Srushti Vaidya

Srushti is a markets reporter at Mint. She writes on equity markets, and her areas of coverage range from brokers and exchanges to mutual funds and the fast-evolving alternatives space, including GIFT City, from the financial capital of India. She has an experience of over three years in journalism, and has previously worked at Moneycontrol. She has an undergraduate degree in mass communication and a postgraduate diploma in business and financial journalism from Asian College of Journalism, Chennai.Srushti prefers meeting people from the industry over making calls. Her work aims to drive impact—her story on illegal gold imports, for instance, caught the government’s attention and contributed to a policy shift. She specialises in turning complex market data into clear, engaging stories so even her grandmother could understand futures and options.Outside of the newsroom, she enjoys spending money on jewellery and watching thriller films—especially the kind that keep her awake at night. She spends 1.5 hours a day commuting in Mumbai locals, listening to horror podcasts on her way to work. She’s also very talkative—so reach out only if you have lots of time.