Should you add silver instead of gold after the duty hike-triggered price rally? Experts say, ‘a tactical addition…’
India has increased import tariffs on gold and silver to 15%, up from 6%, to reduce imports and protect foreign exchange reserves. This tariff increase led to a nearly 6% price surge in both metals, impacting demand for gold jewellery and prompting investors to consider silver as an alternative.
India, the world's second-largest gold consumer, has raised tariffs on gold and silver to 15% from 6% to curb imports and ease pressure on its foreign exchange reserves. The move immediately pushed up precious metal prices, with both gold and silver surging nearly 6% on Wednesday.
Despite the recent sharp rally, silver remains significantly cheaper than gold. Even at its peak, silver prices touched around ₹4 lakh per kg and are currently hovering near ₹2.9 lakh per kg. In comparison, gold prices have climbed to nearly ₹1.5 lakh to ₹1.6 lakh for 10 grams.
Demand for gold jewellery was already weakening due to high prices, and further gains are likely to hit purchases in the short term and push buyers towards lower-carat items. And, now, many small investors are wondering whether silver could be a better investment option than gold.
What is the silver rate today? How does it compare with gold?
Quick answers to key questions
India raised tariffs on gold and silver to 15% from 6% to curb imports, ease pressure on foreign exchange reserves, and protect the rupee. This move aims to reduce the outflow of money from the country due to rising precious metal prices.
While silver has growth potential due to industrial demand, its returns are more volatile, making it riskier than gold for small investors. Experts suggest treating silver as a tactical addition rather than a primary alternative for stability.
The gold-silver ratio measures how many ounces of silver are needed to buy one ounce of gold. A falling ratio, like the recent drop below 55, indicates that silver has recently outperformed gold in terms of price.
The duty hike could lead to a decline in business for the jewellery sector, potentially affecting employment. There are also concerns that higher duties might revive gold smuggling activities, which had decreased after previous duty cuts.
Global factors such as inflation concerns, geopolitical tensions (like the Iran conflict), and uncertainty in US monetary policy drive safe-haven demand for gold and silver. Industrial demand, particularly from sectors like solar energy and electric vehicles, also influences silver prices.
Silver prices in India declined on Thursday, 14 May, on profit booking after the white metal jumped over 6% in the previous session, following the Indian government's unexpected increase in import tariffs on gold and silver, a move aimed at protecting the rupee and strengthening the country’s foreign exchange reserves.
Silver prices on MCX fell 1.9% to ₹2,94,450 per kg, while gold prices fell 0.7% to ₹1,61,027 per 10 grams.
Should smaller investors invest in silver rather than gold?
Answering this, Abhishek Kumar, SEBI RIA, Founder- SahajMoney, said, “Silver does experience higher industrial demand and growth potential, but it also makes its return extremely volatile, making it riskier than gold for small investors.”
But if one is looking for capital preservation despite higher entry costs, gold offers a safer choice, he added. “So small investors should treat silver as a tactical addition rather than a primary alternative to gold’s stability.”
What investors should do if they already have silver in their portfolio?
The sharp increase in silver prices over the last year was driven partly by its status as a safe-haven precious metal and partly by its industrial demand, shares Vishal Dhawan, Founder & CEO, Plan Ahead Wealth Advisors.
“With inflation impacts starting to show globally due to the higher oil prices and supply chain disruptions due to the West Asia war, there is a likelihood that a global slowdown could follow, resulting in lower industrial demand.”
He advises that investors in silver should be comfortable with the high volatility silver displays and be cautious about adding more.
Why is Centre targeting gold and silver imports?
India's current account deficit (CAD) is under pressure from imports of precious metals, which the Centre considers non-essential.
Although import volumes of gold and silver have remained almost the same, rising international prices have sharply inflated the import bill, increasing foreign exchange outflows and putting pressure on the rupee.
According to Commerce Ministry data, India spent a record $84 billion on gold and silver imports in FY2025–26, up from $35.5 billion a decade earlier.
About the Author
Sanchari Ghosh is an Assistant Editor at Mint with over 12 years of experience in journalism, specialising in personal finance, DLT & DeFi, geopolitics and foreign policy, with a particular emphasis on how these areas intersect. <br> She writes extensively about how money works in everyday life—helping readers navigate personal finance decisions. <br> As AI reshapes investing behaviour, capital is increasingly flowing into decentralized ecosystems, redefining how assets are managed, traded, and valued. She focuses on explaining how money flows within frameworks like Distributed Ledger Technology (DLT), DeFi protocols, and crypto markets—while also exploring what the future of money could look like in a trustless, programmable financial world. <br> She also focuses on immigration-related issues, simplifying complex topics around visas, passports, overseas financial planning, and the many practical challenges Indians face while moving or living abroad. <br> Alongside personal finance, Sanchari has a strong understanding of international politics, contemporary and historical conflicts, and global state decisions. She closely tracks how geopolitical developments influence economies, markets, and individual financial choices, bringing together finance and global affairs in her reporting. <br> She began her career as a desk editor, which gave her a strong foundation in news writing. Over time, her interest naturally shifted toward personal finance. Before joining Mint in 2020, she worked DNA, The Times of India, Outlook Money, BloombergQuint, and ETMoney. At Mint, she got an opportunity to expand her coverage to include immigration and geopolitical developments while continuing to closely follow personal finance trends and market movements.As a journalist, she is committed to accuracy, intellectual rigour, and fairness. <br> She is an English Major and her work took her across cities including Delhi, Mumbai, and Pune. Living independently from an early age gave her firsthand experience in managing life and money on her own. This practical exposure sparked her strong interest in personal finance. <br> Outside the newsroom, Sanchari is a sports enthusiast who regularly plays lawn tennis and squash. In her younger years, she was also a national-level badminton player.
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