Silver has long been in the shadow of gold, admired but often overlooked. This year, it has taken the spotlight, drawing attention from investors around the world. Its unique position as both a precious metal and an essential industrial material is creating a perfect storm for growth. India is right at the heart of this story, seeing rising demand from both industries and individual investors.
Silver Outperformed Gold in 2025
In 2025, silver surprised many by outperforming gold. Prices in India rose more than 45% year-to-date, and silver ETFs delivered returns as high as 55%. These gains are well ahead of gold, which grew around 20% to 25%. The rally is backed by a global supply deficit and silver’s important role in manufacturing and industry.
Industrial Demand Anchors Growth
India’s industrial demand for silver grew 4% in 2024. This growth is fueled by the country’s expanding solar energy sector, increasing electric vehicle production, electronics manufacturing, and jewellery demand. These factors make India the largest silver consumer in the world by volume. Unlike gold, silver has strong industrial uses, which provide a solid foundation for its prices.
Global Deficit Strengthens the Outlook
The global silver market has been running a deficit for four years in a row. In 2025, the shortfall is estimated at nearly 150 million ounces. Despite record-high prices, both industrial and investment demand continue to grow. India’s silver imports are expected to reach between 5,500 and 6,000 tonnes this year, reflecting the strength of local demand.
Indian Investors Join the Rush
Investment demand in India has seen a significant surge. Silver coin and bar purchases increased by 21% in 2024, even as global demand softened. Silver ETFs are particularly popular. HDFC, SBI, and Nippon India ETFs all delivered over 54% returns in 2025, drawing inflows three times higher than usual. Investors are increasingly looking at ETFs and SIPs as accessible and liquid ways to invest.
Higher Volatility, Higher Reward
Silver comes with more ups and downs than gold. Historically, its annual returns of 7 to 8% have lagged behind gold’s 10%, but volatility can create opportunities. Over the last three months, ending Sep 2025, silver gained 29% compared to gold’s 16%. For investors willing to navigate short-term swings, regulated vehicles like ETFs and SIPs make silver an attractive and tax-efficient option.
Investor Takeaway
The silver rally in 2025 is not just a temporary story. It reflects strong global demand, ongoing supply deficits, and growing consumption in India. For Indian investors, silver offers an exciting opportunity. It is outperforming gold, supported by industrial growth, and now easily accessible through ETFs and SIPs that provide liquidity, regulation, and tax efficiency.
Disclaimer
This blog is purely for educational purposes and should not be considered investment advice. Please do your own research or consult a registered financial advisor before making any investment decisions.