How to Buy Silver in India?
Purchasing physical silver in India is straightforward and can be done through various channels:
- Jewellers and Retail Outlets: Visit trusted jewellers like for coins, bars, or ornaments. Ensure BIS hallmarking for purity.
- Online Platforms: Many ecommerce platforms offer certified silver products with home delivery. Compare prices and check for secure payment options.
- Banks and Government Mint: Public sector banks and the Indian Government Mint sell silver coins and bars at competitive rates.
Checklist Before Buying Silver in India
Before investing in silver, tick off these essentials:
- Purity Verification: Confirm 99.9% (999) fineness with a BIS hallmark.
- Price Comparison: Check rates across different cities.
- Tax Implications: Account for 3% GST on purchase and 20% capital gains tax on resale after 36 months.
- Storage and Security: Decide on the storage based on your requirements.
- Market Timing: Check the market for any opportunities for buying.
- Documentation: Insist on invoices and certificates for future resale.
Factors Influencing Silver Price
Silver prices are shaped by a complex interplay of global and domestic factors. In 2025, industrial demand has been a major driver, with silver's use in photovoltaics, electric vehicles, and 5G technology pushing consumption higher amid a persistent supply deficit. Geopolitical tensions, such as ongoing conflicts and trade uncertainties, have bolstered silver's safe-haven appeal, similar to gold.
Interest rate policies from central banks like the US Federal Reserve influence investor sentiment, lower rates typically favour precious metals by reducing the opportunity cost of holding non-yielding assets. Inflation expectations and currency fluctuations, particularly the US dollar's strength, also play a role, as silver is priced in dollars globally. Domestically, import duties, GST (3% on silver), and festival season demand in India add layers of volatility.
Options to Invest in Silver in India
- Physical Silver: One can buy coins/bars from jewellers.
- Silver ETFs/Funds: Many ETFs and index funds are available from various mutual fund companies.
- Futures & Options on MCX: This can be used by hedgers/traders seeking leverage.
- Silver Mining Stocks: they can give indirect exposure via global ADRs like Pan American Silver (traded on NSE via brokers).
Sovereign Silver Bonds: They are Government-issued, tax-free interest (2.5% p.a.), but are currently suspended.
How to Trade in Silver in India?
Trading silver in India primarily occurs on the Multi Commodity Exchange (MCX) via futures contracts, offering leverage for short-term gains. Here's a step-by-step guide:
- Open a Trading Account: Choose a SEBI-registered broker like Angel One. Complete KYC with PAN, Aadhaar, and bank details.
- Fund Your Account: Deposit initial margin (5-10% of contract value; e.g., ₹5,000-10,000 for a mini silver contract).
- Select Contract: MCX offers silver futures in lots of 1 kg (mini) or 30 kg, expiring monthly.
- Monitor and Exit: Track international prices for understanding price trends.
How is Silver Rate Measured?
Silver rates in India are quoted per gram or kilogram, benchmarked against international spot prices on COMEX/London Bullion Market, converted to INR via USD-INR exchange rates. Domestic factors like import duties (10.75%) and local premiums adjust the final rate. Purity is standardised at 99.9%, with rates updated via MCX settlements. Tools like API feeds ensure real-time accuracy across platforms.
Difference Between 999 Silver and 925 Silver Rates
Aspect | 999 Silver (Fine Silver) | 925 Silver (Sterling Silver) |
Purity | 99.9% pure silver (999 fineness) | 92.5% pure silver alloyed with 7.5% other metals (usually copper) |
Typical Rate per Gram | Higher; serves as the benchmark rate (e.g., full spot price) | Lower; approximately 92.5% of the 999 rate, making it 7-8% cheaper |
Common Uses | Investment bars, coins, bullion for resale | Jewellery, ornaments, tableware due to enhanced durability |
Durability | Softer and more malleable; prone to scratches | Harder and more resistant to wear, ideal for daily use |
Hallmarking | BIS hallmark with 999 mark for authenticity | BIS hallmark with 925 mark |
Investment Suitability | Preferred for purity and long-term value retention | Better for functional items; lower resale premium due to alloy |
Silver ETFs in India vs Physical Silver
Aspect | Silver ETFs | Physical Silver |
Liquidity | High, traded intraday on stock exchanges like shares | Moderate, depends on local buyers |
Storage | Demat account; no physical custody | Requires safe or locker |
Costs | Expense ratio 0.5-1%; GST-exempt | 3% GST + fabrication fees |
Minimum Entry | ₹500 per unit | Depends on the purity and quantity |
Taxation | 12.5% LTCG after 1 year | 20% LTCG after 36 months |