The confluence of robust industrial consumption, with developments in the solar and electric vehicle sectors, and a weakening Indian rupee underlies the bullish thesis. Silver’s dual role – as an irreplaceable industrial commodity and as a safe haven – has made 2025 an inflection point for price trends, with domestic silver ETFs up nearly 70% this year amid record inflows and spot market premiums. Motilal Oswal’s projections are based on the expectation that the USD/INR will move towards $90, which will improve returns for local investors as the international price of silver rises alongside the depreciation of the rupee.
“Looking ahead to the 2026-2030 period, experts broadly agree that the INR will continue its gradual decline against the USD, clustering between 90.00 and Rs 102 per USD, driven by global monetary policy and underlying economic fundamentals. The implications for INR-denominated assets are clear: a rising silver price in the USD coupled with a simultaneous depreciation of the INR creates powerful leverage.
If the dollar price of silver reaches the bullish targets of $70 per ounce by 2027 and the INR depreciates to the upper end of the expected $92-95 range, percentage returns for Indian investors will be significantly improved.” This compounding effect softens the impact of potential local price corrections and strengthens silver’s role as a portfolio stabilizer in an environment of currency weakness.
In the medium term, the brokerage foresees consolidation around the Rs 2.40 lakh level before silver tests Rs 2.46 lakh. Fundamentals – structural industrial demand outpacing inelastic supply, exacerbated by inflation, global geopolitical tensions and limited mine expansion – are seen to be pushing the metal to new highs. The report highlights that industrial use now accounts for 59% of global silver demand, driven by the solar, electronics and automotive sectors, while technological innovations and the ‘frugal paradox’ in solar energy production cannot offset the massive volume growth in demand.
Motilal Oswal further warns of ‘periodic backwardation and high EFP spreads’, confirming the acute physical tightness and logistical stress in the market, while recommending Indian investors to efficiently gain exposure using MCX futures as the market trades in backwardation, and ultimately switch to silver ETFs for long-term portfolio allocation. While extreme volatility remains a risk – with silver moving about 1.7 times faster than gold – analysts expect robust returns from compounded international price appreciation and INR depreciation as continued supply shortages will push domestic spot prices towards the Rs 2.46 lakh target. Silver investment opportunities in India are accelerating rapidly, moving beyond the traditional cultural demand for institutional and retail investment vehicles. Silver ETFs in India have performed noticeably better in 2025, rising about 69% year to date. This performance has attracted significant flows, evidenced by a 180% increase in silver ETF monthly inflows through August 2025. While gold ETFs maintain higher overall investor inflows due to established cultural dominance and liquidity, the rise in silver ETF investments demonstrates growing institutional and private interest in silver as both a high-value investment beta growth as a hedge against inflation and geopolitical tensions. These ETFs, often backed by actual physical silver stored in vaults, provide efficient exposure to the global structural bull market, the report said.
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