Shares of Hindustan Zinc Ltd. are likely to remain in focus today after the Centre tightened import norms for silver and precious metals.
Hindustan Zinc is among India’s largest silver producers, with silver contributing significantly to its revenue mix alongside zinc and lead operations. The company produced around 746 tonnes of refined silver in FY25, according to company disclosures, making it a key domestic player in the silver supply chain.
Why the government tightened silver import norms
The latest policy measures have put domestic silver producers under investor focus as markets assess whether tighter import rules could influence local supply dynamics, pricing trends and demand for domestically produced silver.
The government’s latest move comes amid a sharp increase in precious metal imports, which can widen the current account deficit and raise foreign exchange outflows.
India’s bullion import bill has increased over the past year due to elevated global gold and silver prices and strong domestic demand from jewellery, investment and industrial sectors.
Authorities have also increased scrutiny on imports routed through concessional duty channels under free trade agreements. The measures are aimed at improving compliance, strengthening traceability and regulating lower-duty imports more closely.
The move follows the government’s decision to increase customs duty on gold imports to 15%, including Agriculture Infrastructure and Development Cess.
Rupee weakness adds pressure on bullion imports
The government’s move also comes at a time when the Indian rupee has weakened sharply against the US dollar over recent months, increasing the cost of imports for commodities such as gold and silver.
The rupee started 2026 near the 89.9-per-dollar level but weakened steadily through March and April as crude oil prices surged and foreign portfolio outflows intensified.
On May 15, the rupee touched a fresh record low of 96.13 against the US dollar in intraday trade amid elevated crude oil prices and continued pressure in global markets.
The Indian currency has weakened more than 6% so far in 2026, making it among Asia’s weakest-performing currencies this year.
A weaker rupee raises the landed cost of bullion imports because gold and silver are purchased in dollars. Higher import costs can widen the trade deficit and increase foreign exchange outflows, especially during periods of elevated commodity prices.
Silver imports jump in FY26
India’s Silver imports increased significantly during FY26 due to strong demand from sectors such as solar panel manufacturing, electronics, electrical equipment and jewellery.
According to commerce ministry data referenced in earlier reports, India imported more than 4,500 tonnes of silver during the first ten months of FY26 as industrial demand and investment buying remained elevated.
Higher bullion imports have also coincided with volatility in crude oil prices and global commodity markets, both of which influence India’s trade balance and import costs.