Fears of further price drops and broader economic pressures are keeping consumers away from silver coins and bars, though jewellery continues to hold up.
Bengaluru: Silver’s plunge from a record high has failed to revive festive demand in India, as broader economic pressures and fears of further price drops keep consumers from buying. While demand for investment items like coins and bars has collapsed, consumer interest in jewellery continues to hold up. The price slump comes as the government issued permits on 22 October for about 6,500 tonnes of silver imports over the next six months, equivalent to nearly 93% of the more than 7,000 tonnes imported in 2025.
The approvals ease restrictions introduced in May, when the government required prior authorization for silver imports, and tightened in June to cover silver grain and powder. The government had also raised import duties on gold and silver from 6% to 15%, effective 13 May 2026 to curb precious-metal imports and ease pressure on foreign-exchange reserves. The additional supply is expected to ease domestic shortages and premiums, even as demand remains weak.
Silver futures on the Multi Commodity Exchange (MCX) fell 3.5% to ₹1,92,800 per kg on 23 October 2026, down nearly 55% from a record high of around ₹4.2 lakh per kg on 29 January 2026. A year ago, on 23 October 2025, MCX silver futures were trading at about ₹1.48 lakh per kg. The selloff has been driven by a stronger US dollar, elevated bond yields, expectations that US interest rates will remain higher for longer, and concerns about industrial demand.
Silver holds an important place in India’s festive buying, with households purchasing coins and idols for puja and auspicious gifting, alongside jewellery, utensils and decorative items. It is also seen as a more affordable alternative to gold, particularly when gold prices are elevated. On 29 October, 24-carat gold was priced at about ₹1.45 lakh per 10 g, up around 6.2% from ₹1.37 lakh at the start of 2026.
However, sharp price swings in silver this year have complicated buying decisions, with consumers weighing festive purchases against the risk of further declines. Surendra Mehta, national secretary of the India Bullion and Jewellers Association, said, “People are scared. Silver has gone down from ₹4.2 lakh to ₹1.9 lakh. When prices fall this sharply, people fear they could fall further. At the same time, equity markets are falling, oil prices are higher, and interest costs are rising.
People simply don’t have the money to spend.” Shaya, Titan Co.’s dedicated silver jewellery brand operated by CaratLane, has recorded festive sales growth of 25-30% year-on-year, below its expectation of 80-100%, as demand for silver coins has slumped, according to an executive familiar with the matter. “One major reason is the total sales eradication in the coins category,” the executive said, adding that coins accounted for about 30% of Shaya’s sales during the previous festive season.
Last year’s festive season was among the best in Shaya’s history, the executive said. This year, however, growth has fallen short of expectations despite the brand expanding its product portfolio and sales channels. The executive attributed some of the gap to the timing of the festive calendar, which had raised expectations of stronger sales across the season. This gap extends across Titan’s broader portfolio, where growth has trailed expectations, the executive said.
While CaratLane was expanding at 40-50% and brands like Tanishq and Mia typically posted 20-30% growth, the executive described current performance across the portfolio as decent, though well short of earlier projections. Shaya has stepped up discounts to draw consumers back, offering a flat 40% off across its products and an additional 10% off when customers buy two items. The executive described this as a temporary strategy, saying the brand would remove the discounts after Diwali.
“We want to try a deep discount strategy,” the executive said. The brand is also expanding its range of lower-priced products (under ₹2,000) as it adapts to higher silver prices. Its portfolio has grown from around 1,500 stock-keeping units (SKUs) to 2,400, with a greater emphasis on affordable, minimalist designs. “Low value price point introduction is our predominant go-to-market strategy recently,” the executive said, adding that while the brand began seeing early results from the shift in August, the momentum did not carry through into the current month.
Rahul Mehta, managing director of Silver Emporium, said elevated prices were weighing on investment-led purchases. “Higher prices have also softened demand for silver bars and coins, while demand is shifting towards personal consumption and jewellery,” he said. This shift is reflected across traditional jewelers. At Gargi, the silver jewellery brand of P.N. Gadgil & Sons, demand for plain silver ornaments, utensils and traditional items such as Ganesh idols has slowed, even as jewellery has remained relatively resilient, said Aditya Modak, the company’s chief financial officer and chief operating officer.
“There has been some slowdown in demand for plain silver ornaments, utensils and traditional silver items such as Ganesh idols,” Modak said. “Sales across several stores have been at par with last year while a majority of stores have recorded growth,” he added. The mixed performance shows how demand is diverging across silver categories. While consumers are gravitating towards jewellery as an alternative to gold for festive purchases and gifting, they are choosing lighter products in categories such as silver articles and utensils, Modak said.
Silver jewellery typically weighs around 5-7g, limiting the absolute increase in the final purchase price despite the sharp rise in silver prices, he said. Gargi expects sales to pick up closer to Dhanteras and Diwali, with silver jewellery and coins among its strongest-demand categories this festive season. The festive slowdown in silver demand is not hitting all players equally. Smaller, design-led brands such as Tribe Amrapali and Angara continue to post growth, with contemporary jewellery and accessible price points helping sustain interest even as consumers become more selective.
At Tribe Amrapali, silver sales have grown year-on-year thanks to demand for contemporary jewellery, gifting and decorative pieces, said chief executive Akanksha Arora. “High gold prices may be prompting some consumers to explore silver, but we see silver increasingly being valued for its own design appeal rather than simply as an alternative to gold,” she said, adding that consumers were seeking “distinctive, wearable designs” that could be worn beyond the festive season.
Angara meanwhile reported festive sales growth of 15-18% in value terms from a year earlier, with volumes stronger than the trade had expected, said founder and chief executive Ankur Daga. “The moment they saw prices slip below ₹2 lakh a kg, they treated it as a window to buy,” he said. Demand has been particularly strong for contemporary silver jewellery paired with coloured gemstones, including rings, delicate necklaces and stackable bracelets.
