Summary of this article
Global silver supply declining; demand surges due to industrial needs.
Renewable energy, semiconductors, electronics drive India’s silver consumption rise.
Investment options: coins, bars, jewellery, ETFs; prices remain volatile.
By Chakravarthy V.
Silver has always had two sides. On the one hand, it is important for its cultural and decorative worth, and on the other, it is extremely important for fields such as electronics and solar energy. This duality has become evident in 2025. The price of the metal has gone up by almost 36 per cent in the first seven months of this year. MCX is now selling it for roughly Rs 1,13,000 per kg (at the time of writing the article).
Silver isn't as essential to a lot of people when it comes to investing as stocks or real estate. But now, its story isn't only about tradition. It's also about how politics, technology, and economics come together in ways that don't happen very often.
The Current Situation in India
Use: About 4,000 tonnes a year
The country manufactures around 600 tonnes, while the rest originates from other countries.
China, Peru, and Mexico are the three main sources.
Because silver has to be imported, its price is very closely linked to supply and demand across the world. The country's supply has been limited even while demand has been steadily rising. This means that the country hasn't been able to keep up with how people are consuming goods.
What policies are causing the demand to go up?
1. Promises to use energy from sources that won't run out
India has promised to get 500 GW of renewable energy by 2030, with 300 GW coming from solar panels. For every megawatt of capacity, you need 20 to 25 kilograms of silver. This is especially important for solar panels.
This means that solar alone will need almost 75,000 tonnes of silver, which is a lot more than the 4,000 tonnes that are needed each year presently. The solar goal alone shows how industrial demand might change silver's place in the economy.
2. The semiconductor business is getting bigger
In April 2025, the government obtained the go-ahead to build three big semiconductor plants.
Micron is in Gujarat, Tata-PSMC is in Assam, and CG Power is in Karnataka.
These fabs have received Rs 1.2 lakh crore in investments and would need between 50 and 100 tonnes of silver per unit each year, which is around 300 tonnes higher than the total.
3. Electronics and Making Things Push
India wants to produce $ 300 billion worth of electronics by 2026 through the Create in India and PLI programs. Smartphones, laptops, LEDs, and even electric automobiles all need little but important amounts of silver.
For laptops, 200 to 300 mg; for LEDs and parts for electric cars, 500 to 1,000 mg. More use since it has to carry electricity and survive for a long time
This push might entail an extra 500 to 800 tonnes of demand every year in the medium term.
The Bigger Equation: Demand and Supply
It seems that there will be a lot of demand for silver when you add together all of these policy-based demands:
There is a demand for about 4,000 tonnes a year right now.
There is an extra demand of about 9,000 tonnes for solar panels, electronics, and manufacturing.
Around 13,000 tonnes of demand are expected.
This is more than 120 per cent more than what it is now.
In 2015, the world's supply of silver was at its greatest, at over 26,600 tonnes. It has been going down steadily since then. It's not easy or quick to get more silver because it is usually mined as a by-product of other metals, like zinc. The most important thing to know about today's silver news is that demand is rising quickly while supply is about the same.
Knowing What Could Go Wrong
There are solid reasons for demand; however, silver does have certain problems:
Economic cycles: Demand may drop as the economy slows down because industrial activity slows down.
Material innovation: Silver may not be as vital if new materials come up that can be utilised in electronics or solar panels instead of silver.
Volatility: Silver prices have a long history of going up and down a lot. They usually shoot up by 50 per cent to 500 per cent and then fall quickly.
These risks show that silver, like all other commodities, works best when things are not certain.
Different Ways to Invest in Silver
If you want to know more about the story of silver, here are several methods to discover it:
People usually buy silver in the form of coins, bars, or jewellery. It is real, but you need to think about things like security, storage, and making charges.
Exchange-Traded Funds (ETFs): India and the rest of the globe have silver-backed ETFs that follow the price of silver and are easier to trade than genuine silver.
There are pros and cons to each format, such as how simple it is to go to, how much it costs, and how well it spreads out.
Last Thought
These days, silver is more than just a pretty metal or a way to keep your money secure. Changes in energy, the growth of digital technology, and the desire to make things all play a big role. Silver is at a unique turning point since demand is set to rise a lot while supply stays very stable throughout the world.
Politics and industry are working together to influence how silver is used; therefore, the next ten years will be very important.
The author is Cofounder & Executive Director, Prime Wealth Finserv Pvt Ltd.
(Disclaimer: Views expressed are the author's own, and Outlook Money does not necessarily subscribe to them. Outlook Money shall not be responsible for any damage caused to any person/organisation directly or indirectly.)
