New Delhi
India’s silver exchange-traded funds (ETFs) are trading at unusually high premiums over global prices due to strong festive demand and tight global supply, according to a report by Axis Mutual Fund. The report said heavy buying of silver in India has driven prices up as jewellers and investors rush to secure supplies ahead of the festive season.
Global investment in silver ETFs rose sharply in the first half of 2025, adding around 95 million ounces — more than all of last year’s inflows. This brought total global ETF holdings to nearly 1.13 billion ounces, worth over $40 billion.
Axis Mutual Fund said silver supply from mining has only increased slightly and may reach its peak by 2026. At the same time, demand continues to rise, powered by the growth of solar energy, electric vehicles, electronics, 5G networks, and semiconductors. Purchases by Saudi Arabia’s central bank have also boosted interest among other central banks.
In India, festive buying has been strong, with imports of silver doubling in September compared to last year. ETFs are now trading at premiums between 5 and 12 percent over global prices, including taxes. Normally, such price gaps are reduced through arbitrage, but limited physical silver has kept premiums high.
Axis Mutual Fund cautioned that once supply improves, ETF values could correct in the short term. However, it noted that silver remains a valuable long-term investment and a hedge against uncertainty for investors taking a multi-year view.
