India Wants Silver Over Gold in 2025

Silver ETF Growth in India Outpaces Gold Amid Shifting Market Dynamics

Silver ETF Growth in India Outpaces Gold Amid Shifting Market Dynamics

Over the last one year, since June 2024, the assets of silver exchange-traded funds have grown by 126 percent, compared to an 82 percent rise in the assets of gold ETFs

Silver exchange-traded funds (ETFs) have recorded an exceptional rise in assets under management (AUM) over the past year, signaling a structural shift in investor behavior. From June 2024 to May 2025, silver ETF AUM in India rose from ₹7,473 crore to ₹16,866 crore—a 125 percent increase. By comparison, gold ETFs grew 81 percent during the same period, expanding from ₹34,355 crore to ₹62,452 crore.

The growth in silver ETF participation is notable not only for its pace, but also for its breadth. Over 837,000 investor folios are now linked to silver ETFs, up sharply from just over 600,000 in January 2025. These developments follow the 2021 regulatory decision by SEBI to allow silver ETFs in the Indian market. Since then, investor participation has accelerated, with May 2025 alone seeing net inflows of ₹853 crore—nearly triple the ₹292 crore seen in gold ETF inflows that month.

This growth comes in spite of lower absolute returns. From June 2024 to June 2025, silver gained 23.6 percent in dollar terms, while gold advanced over 43 percent. The higher growth rate in silver ETF AUM is, in part, a function of a smaller base, but it also reflects the underlying investment case being made around the metal's dual role.

Silver is both a precious and industrial metal, and its demand is increasingly driven by renewable energy, automotive, and electronics applications. This makes it more responsive to physical supply constraints than gold. “Silver is more like a regular commodity. If the supply is less and the demand is more, automatically prices will rise,” said Ravi Kumar TV, of Gaining Ground Investment Services.

Increased industrial use, inflation hedging, and geopolitical instability are fueling the rally. Vishal Jain, CEO of Zerodha Fund House, notes that silver’s relevance will continue to grow “as the global push for sustainability accelerates.”

However, analysts are quick to caution that silver’s volatility is often more than double that of gold. Nilesh Naik of Share.Market highlighted its sensitivity to economic cycles and industrial demand. As such, while gold remains suitable for core, long-term portfolio inclusion, silver is often recommended only for tactical exposure. “It may be suitable for aggressive investors… Risk-averse investors would be better off avoiding silver funds,” he said.

The current silver price is near a 13-year high, offering opportunity and risk in equal measure. Long-term trends support the bullish thesis, but disciplined allocation remains essential.