India has reclassified certain silver bars from a free import category to a restricted category, requiring government licenses for acquisition [1].
This move aims to stabilize the national currency and reduce the overall import bill. By tightening controls, the government seeks to prevent arbitrage opportunities that emerged following a recent 15% import-tax hike and the free-trade agreement between India and the UAE [2, 3].
The Directorate General of Foreign Trade (DGFT) said the change is effective immediately [1]. Under the new rules, duties on restricted silver bars have been raised above 18% [3].
The decision follows a period of significant volatility in the precious metals market. Data shows the import value of silver surged 150% during the 2025-26 fiscal year [3]. This sharp increase put considerable pressure on the rupee, prompting the Centre to intervene to control the outflow of capital [1, 2].
Government officials said the restriction is necessary to block loopholes created by the 15% tax hike [2]. Without these licenses, the government said that the discrepancy between domestic prices and international rates would continue to incentivize unauthorized trade [3].
Silver has historically been a popular hedge and investment in India, but the recent spike in import volume reached levels that the DGFT deemed unsustainable for the current economic climate [1, 3].
“Import value of silver surged 150% during FY 2025-26”
This policy shift indicates a strategic move by the Indian government to prioritize macroeconomic stability over the free flow of precious metals. By transitioning silver to a restricted status, India is attempting to decouple its domestic market from international arbitrage triggers, effectively using trade barriers to protect the rupee's value against a backdrop of rising import costs.
