Silver ETFs in India have outperformed gold ETFs in 2025, with a 69% increase year-to-date and a 180% rise in inflows in August, driven by growing institutional and retail interest in silver as a promising growth asset and hedge.

This bullish trend is supported by rising industrial consumption, especially in solar and electric vehicle sectors, and a weakening Indian rupee, which together push domestic silver prices higher amid record ETF inflows and spot market premiums.

The ongoing rally is underpinned by seven consecutive years of global supply shortfalls, expected to persist through 2025, establishing a price floor and differentiating this rally from previous speculative bubbles in 1980 and 2011.

Forecasts from Motilal Oswal suggest a significant rally in silver prices, with domestic prices potentially reaching Rs 2.40 lakh per kilogram by the end of 2026, driven by structural supply deficits and rising demand from green technologies.

In the medium term, silver prices are expected to consolidate around Rs 2.40 lakh before testing Rs 2.46 lakh, supported by strong industrial demand, inflation, geopolitical tensions, and limited mine expansion, which sustain upward pressure.

Given market conditions of physical tightness and logistical stresses, investors are advised to consider using MCX futures during backwardation and switching to silver ETFs for long-term exposure, due to high volatility and rapid price movements compared to gold.

Industrial demand now accounts for 59% of global silver consumption, mainly from solar, electronics, and automotive sectors, with technological innovations unable to offset the volume growth.

If international silver prices reach $70 per ounce by 2027 and the INR depreciates to around Rs 92–95 per USD, Indian investors could see significantly higher returns due to currency effects.

Motilal Oswal anticipates the USD/INR exchange rate moving towards $90, which would amplify returns for Indian investors as rising international silver prices coincide with rupee depreciation, creating leverage.