India Issues 6,000 Tonne Silver Import Permits for Diwali

The Government of India issued silver import permits for up to 6,000 tonnes to ensure adequate supply ahead of the Diwali festival on November 8. These permits remain valid for six months and aim to resolve supply constraints caused by licensing requirements introduced in May to protect the rupee and foreign-exchange reserves.

The move has already impacted the market, with domestic premiums dropping to approximately 50 cents an ounce over the global benchmark, down from around $2 the previous week. While the new quotas are designed to cover expected demand spikes during the festive period, overall silver consumption in India is projected to be lower than the previous year.

Market analysts attribute the projected decline in consumption to subdued stocking by wholesalers and retailers, as well as a decrease in the tradition of silver gifting.