By Sugandha Mukherjee
Silver exchange-traded funds (ETFs) are gaining momentum among Indian retail investors, riding on record-high prices and growing demand for transparent, regulated investment options. So much so that the white metal has attracted higher interest than gold, and also delivered higher returns than the yellow metal over a five-year term.
The metal, considered gold’s poor cousin, delivered a five-year return of 17.3%, outperforming gold’s 15.8%, aided by its dual identity as both a precious and base metal, as per Bloomberg MCX data as of June 17. In May 2025, silver ETF inflows were also nearly three times higher than those into gold ETFs, which stood at Rs 291.92 crore.
As of May 2025, net inflows into silver ETFs, launched in early 2022 following SEBI’s approval, surged over six-fold in two years — from Rs 140 crore in May 2023 to Rs 853 crore in May this year. As per data from the Association of Mutual Funds in India (AMFI), the segment now manages Rs 16,866 crore across 15 schemes, up nearly nine times from Rs 1,852 crore two years ago. Funds from Nippon India, ICICI Prudential and Kotak delivered returns of 23.40%, 23.77%, and 23.70%, respectively, over the past year, till date.
“Silver is treated as a safe haven, especially during periods of geopolitical tension like the Iran conflict,” said Kaynat Chainwala, AVP, commodity research, Kotak Securities. “Industrial demand from sectors like solar and electronics is also strong. Though more volatile than gold, silver is structurally bullish over the long term. Investors can consider SIPs or staggered investments,” she said.
Driven by global tensions and strong industrial appetite, silver futures hit an all-time high of Rs 1,09,748 per kilogram on the Multi Commodity Exchange (MCX) on June 18. On Thursday, prices eased to Rs 1,07,277 per kg.
Beyond ETFs, digital silver is also witnessing sharp traction. “We have seen 2.5–3x growth in digital silver demand over the past three months,” said Renisha Chainani, head of research, Augmont, adding that in April, largely owing to Akshaya Tritiya, over 800 kg of digital silver was purchased by customers through the platform.
He said there is more demand for digital silver than digital gold in 2025. While, digital gold demand has grown 20-30% from the previous year, digital silver demand has grown 250%-300% in recent months in comparison to last year.
“It is especially popular among Gen-Z and first-time investors due to its low entry barrier, transparent pricing, and micro-investment options.”
However, digital silver operates outside SEBI or RBI’s regulatory purview. Most platforms function under industry best practices and engage SEBI-registered custodians, but investor protections remain limited.
Jewellers, too, are witnessing a parallel uptick in physical silver demand. “We have seen a noticeable increase in silver sales over the past year,” said Piyush Gupta, director, PP Jewellers by Pawan Gupta. “Many customers are purchasing silver coins and bars for investment purposes.”
With festivals like Ganesh Chaturthi approaching, jewellers expect the momentum to continue. “We continue to see steady interest in silver coins, bars, and puja items,” said Ramesh Kalyanaraman, executive director, Kalyan Jewellers.
With prices elevated and use cases expanding, analysts say silver ETFs are well-positioned to attract long-term investors looking for diversification and regulatory comfort.