India's Silver Imports Crash 91% Amid Currency Defence Measures

India's silver imports have plummeted by 91% in just one month due to a combination of factors unrelated to demand. The country imported over 1,500 tonnes of silver last October, but by May this year, that figure had dropped to under 50 tonnes.

The reason behind this drastic decline lies in the country's efforts to defend its currency, the rupee. When crude oil prices skyrocketed to $118 a barrel in April, India's trade deficit widened significantly, and the rupee became the worst-performing Asian currency of 2026, falling by around 7% to a record low near 96 to the dollar.

In response, New Delhi raised the import duty on gold and silver to 15% from 6%, making bullion expensive and difficult to bring into the country. This move effectively closed off one-third of the global market's shortfall in 2026, which is forecasted to be around 46.3 million ounces.

While this may seem bearish for silver investors, it's essential to note that India's demand for silver remains strong, driven by investment rather than jewellery demand. The country's largest domestic producer, Hindustan Zinc, has been struggling to meet the demand, and dealers are charging premiums of over 10% above benchmark prices due to scarcity.