Silver ETFs trading at a steep premium over international prices: Explained
Mon Oct 13 2025
Indian investors looking to invest in Silver ETFs may be getting a raw deal. According to the Axis mutual fund report, Silver ETF prices are trading at steep premiums over international benchmarks.
The premium of the Indian silver price over the global price surged from almost 0.5% in early September to nearly 5.7% (as of October 9 close), with intraday spikes of up to 12%, according to the report.
Silver is an internationally traded commodity. Silver price in India is influenced not only by what’s happening globally but is also subject to import duty and taxes. Additionally, a domestic premium is added before the Silver ETF price is calculated.
Silver ETF investors are facing valuation issues, particularly when ETF units are priced higher than the real value of silver in the spot market.
In the spot market, silver price today is around Rs 1,46,640 per kg. Silver spot price in the international market has surged past $50 per ounce on October 10, before conversion to Indian Rupee.
Here’s why Indian Silver ETFs are seeing a ‘premium’, according to the Axis mutual fund report:
The international spot price or the LBMA price forms the baseline for silver valuation in India.
The LBMA price is then converted to INR per kg using USD/INR rate plus customs duty and taxes. Silver import duty and taxes add roughly 10–12% to USD price. This is the import parity price in Indian markets.
Still, actual traded price in Indian bullion markets or MCX can deviate from the import parity price based on local demand-supply. Currently, there is likely a 5–10% above import parity due to festive demand and shortage.
Source: https://www.financialexpress.com