Silver ETFs Crash 4% As India Approves 6,500 Tons Of Imports; Silver Prices Slide, Nippon, Tata & Others Down

Silver exchange-traded funds (ETFs) tumbled on Friday as fresh import approvals raised expectations of improved domestic availability and easing premiums in India's silver market. The sell-off came as silver futures also declined, with investors weighing the impact of additional supplies alongside unfavourable global cues for precious metals.

Silver ETFs Crash 4% As India Approves 6,500 Tons Of Imports

Nippon India Silver ETF fell around 4% to trade near Rs 182. Similar declines were seen in Tata Silver ETF, Angel One Silver ETF, Mirae Asset Silver ETF, Motilal Oswal Silver ETF, Groww Silver ETF and ICICI Prudential Silver ETF. The weakness reflected the fall in domestic silver prices, which directly influences the value of silver-backed exchange-traded funds.

Why Silver Price is Falling?

The key development behind Friday's decline was India's approval for imports of 6,500 metric Tons of silver over the next six months. The decision has raised expectations that additional supplies could ease the tightness in the domestic market and bring down premiums that had risen amid import restrictions and seasonal demand.

India relies heavily on overseas supplies to meet its silver requirements. As a result, changes in import rules can influence domestic prices even when international silver prices are moving for different reasons. If the latest approvals improve availability, the premium previously commanded by silver in India could narrow, putting pressure on local prices and ETF valuations.

Silver Futures Fall 3%: December, March And May Contracts Under Pressure

Domestic silver futures also recorded losses across multiple contracts. December futures fell around 3% to approximately Rs 1,93,940 per kg, while March and May contracts traded near Rs 1,99,985 per kg and Rs 2,04,513 per kg, respectively.

Since silver ETFs derive their value largely from the underlying domestic silver market, a decline in futures and local prices can translate into losses for investors holding these funds. The exact movement may vary across ETFs depending on expenses, tracking differences and their respective net asset values.

How Import Restrictions Tightened India's Silver Market

The latest approval comes after a period of tighter controls on silver imports. Restrictions were introduced for several forms of silver in mid-May, before being extended in June to cover silver grain and powder. Importers were required to obtain prior authorisation for the affected categories.

These measures constrained supply channels at a time when domestic demand and market premiums were already important factors in price formation. The new permission for 6,500 Tons has therefore shifted attention towards whether the additional volume will be sufficient to ease the supply imbalance.

The impact will depend on how quickly the approved silver reaches the market and how demand evolves over the same period. India is a major silver consumer, with the metal used in jewellery, investment products, utensils and industrial applications. Demand typically receives support from festive purchases and the wedding season, although price volatility can influence buying decisions.

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