Investors seeking fresh avenues beyond stocks and mutual funds are increasingly drawn to a silver ETF, and for good reason. In 2025, silver emerged as one of the most compelling asset stories bolstered by booming industrial demand and constrained supply. According to a recent report by Motilal Oswal Financial Services, silver may face a structural deficit of about 118 million ounces this year as industrial use rises and mining output fails to keep pace.
In India, this dynamic is particularly visible. Domestic silver prices surged past ₹1.8 lakh per kg, while silver ETFs delivered nearly 100% gains year-to-date. Compared with traditional gold investments, silver offers a dual-role: part precious-metal hedge, part industrial commodity. That makes a silver ETF an accessible gateway for investors looking to tap both the inflation-hedge and growth dimensions of the metal without the hassles of storage, purity testing or bulky bars.
This blog unpacks the nuts and bolts of silver ETFs, explores why 2025 could be a pivotal year for them, presents the best options in India, and guides how to evaluate and invest in them.
Let’s dive in.
What is a Silver ETF?
A silver ETF (Exchange-Traded Fund) is a type of investment that allows you to buy silver without buying physical silver. Instead of holding bars or coins, you buy units of a fund that invests in real, high-purity physical silver kept in secure vaults.
Think of it like this: You own a share of silver, not the silver itself.
A silver ETF is traded on the stock exchange just like normal shares. You can buy or sell any time during market hours using your Demat account. The price of each unit changes based on the current market price of silver. So when silver prices rise, the value of your ETF units also goes up.
Why do people choose silver ETFs?
- No need to worry about purity
- No storage issues
- No making charges like jewellery
- Easy to buy and sell online
- Regulated by SEBI (safe investment structure)
Many investors also use silver ETFs to diversify their portfolio, especially during inflation or economic uncertainty, because silver often performs differently from stocks.
In short:
- A modern way to invest in silver
- Low hassle
- Suitable for beginners as well as experienced investors
Why Invest in a Silver ETF in 2025?
In 2025, the case for investing through a silver Exchange Traded Funds is especially strong for several reasons that matter to Indian working professionals looking to diversify without complex metal-handling.
Rising industrial demand
Silver Institute data show that industrial fabrication of silver hit around 680.5 million ounces in 2024, driven by usage in solar photovoltaic (PV) panels, electric vehicles (EVs) and electronics. In 2025, industrial demand is forecast to remain at record levels as green-tech rollout continues.
Supply constraints + structural deficit
Silver’s supply growth is limited most silver is mined as a by-product of other metals, so it doesn’t respond quickly to higher prices. According to the Silver Institute, the market is projected to remain in a deficit of 796 million ouncesfrom 2021 through the end of 2025 forecast period. This structural mismatch supports silver’s price-potential.
Dual role: commodity + precious metal
Unlike many metals, silver serves both industrial and investment roles. In periods of inflation, currency weakness or geopolitical risk, it behaves like a hedge. For an Indian investor who is already exposed to equities/bonds, a silver exchange traded fund adds a different dimension.
Why in India specifically?
- Indian investors now have easier regulated access via ETFs rather than physical bars/coins.
- Silver prices in India have risen sharply, reflecting global momentum making timing relevant.
- Inflation, rupee pressure, and the drive for green energy in India increase the relevance of silver exposure.
Simple access + lower hassle
Investing via a silver exchange traded fund avoids challenges of buying physical silver (storage, security, making charges, purity issues). A silver ETF gives exposure through your Demat/broker account, same convenience as a mutual fund or stock.
In summary, For 2025, a silver ETF stands out because it taps into industrial demand growth, benefits from supply constraints, provides diversification from traditional assets, and offers an accessible way into the metal for Indian professionals.
Top Silver ETFs in India (2025 List)
Below are some of the well-known silver ETFs in India, offering exposure via a silver ETF route.
| Silver ETF | AMC | 1-Year Return | 3-Year Return | AUM (₹ Cr) | Expense Ratio |
| Nippon India Silver ETF | Nippon India | 45.75% | 33.59% | 15,283.75 | 0.56% |
| ICICI Prudential Silver ETF | ICICI Prudential | 46.15% | 33.84% | 9481.23 | 0.40% |
| HDFC Silver ETF | HDFC | 45.30% | 33.73% | 2,425.57 | 0.45% |
| Axis Silver ETF | Axis | 46.06% | 33.83 | 638.38 | 0.37% |
| UTI Silver ETF | UTI | 44.24% | N/A | 618.16 | 0.53% |
| Kotak Silver ETF | Kotak | 45.98% | N/A | 2,018.23 | 0.45% |
| Aditya BSL Silver ETF | Aditya BSL | 46.16% | 33.85% | 1580.22 | 0.35% |
| SBI Silver ETF | SBI | 45.92% | N/A | 1982.35 | 0.4% |
| Edelweiss Silver ETF | Edelweiss | 45.73% | N/A | 477.09 | 0.66% |
Data updated is as of 29.10.2025.
Suggested Read: Top Silver Stocks in India to Invest in 2025 for a Portfolio that Sparkles Like Silver
Performance Analysis & Key Takeaways
Silver ETFs in India have delivered very strong 1-year returns mostly in the 45% to 46% range. This shows how sharply silver prices have moved up in 2025 due to rising global demand and limited supply growth. For a retail investor, it highlights how a silver ETF can capture price rallies without the need to buy and store physical silver.
A big positive here is the presence of multiple top AMCs in the segment; Nippon India, ICICI Prudential, HDFC, Axis, SBI and others. This gives investors a wider set of choices based on their comfort with brand, liquidity, or cost.
Looking at long-term numbers, only a few funds currently show 3-year returns because most silver ETFs in India were launched between 2022-2023. So while short-term performance looks great, investors must remember that silver is a volatile asset. The category has still not completed a full market cycle to show consistent medium-term and long-term behaviour.
AUM tells us another important story: Nippon India Silver ETF dominates with more than ₹15,000 crore in assets. Higher AUM usually means better liquidity, making it easier for investors to buy and sell units without big price differences. Some funds like Edelweiss and UTI have lower AUM, which means volumes may not always be as strong.
Expense ratios range from 0.35% to 0.66%, which is relatively low compared to physical silver products that include making and storage charges. Funds like Aditya BSL Silver ETF and ICICI Prudential Silver ETF stand out with more cost-efficient structures.
Overall, the performance numbers clearly show that silver ETFs have worked well recently. But strong short-term returns should not be the only reason to invest. Silver can move sharply both ways, so a balanced allocation makes more sense than aggressive betting.
Suggested Read: Silver vs. Gold: Reasons Why Silver Could Outshine Gold for Explosive Returns in 2025!
Who Should Invest in Silver ETFs?
A silver ETF may seem attractive because of recent strong returns, but the real question is, is it right for you? Here’s a clear breakdown of the type of investors who are best suited for this category:
Investors Looking for Smart Diversification
Most people in India invest mainly in stocks, gold or mutual funds. Silver moves differently because industrial demand plays a big role in its price. That means when stock markets behave unpredictably, silver can sometimes hold stronger ground.
If you want a portfolio that doesn’t depend on only one type of asset, a silver ETF helps balance the risk.
Suggested Read: Top 8 Gold ETFs in India: A Comprehensive Overview
Investors Who Understand Medium-High Risk
Silver is known to be more volatile than gold. Prices may rise rapidly, but sharp corrections are also common.
Investors who choose silver ETFs should be:
- Comfortable with temporary price swings
- Patient enough to stay invested through cycles
If sudden ups and downs worry you, this category may not match your comfort level.
People Investing in the Next 3-5 Years
Silver is directly linked to the future of:
- Electric Vehicles
- Solar power
- Electronics
- Battery technology
These sectors are booming globally but growth takes time.
A longer horizon allows investors to benefit from these trends rather than short-term market noise.
In short: silver ETFs are best viewed as a medium-term theme play, not a quick trading bet.
Suggested Read: Gold ETFs vs. Gold Mutual Funds: Top pick for Investors in 2025
Investors Who Prefer Digital Over Physical Silver
Physical silver comes with:
- Storage issues
- Security worries
- Making charges (in case of jewellery)
- Purity checks
A silver ETF gives the same price exposure:
- Without storage hassles
- Without wastage/charges
- Fully regulated by SEBI
- Easily bought/sold via Demat account
Perfect for busy professionals who prefer online investing.
Investors Who Already Have Basic Portfolio Foundation
Silver should not be your first investment. Better to build the basics first:
- Emergency fund
- Health insurance
- Equity + debt allocation
Once that is in place, adding 5-10% exposure to silver through ETFs can strengthen the overall portfolio.
Summary: Is a Silver ETF Right for You?
You are a good fit if you:
| If you… | Why does it helps |
| Want to diversify your wealth | Silver behaves differently from stocks/gold |
| Believe in growth of EVs, solar & tech | Silver demand may rise with innovation |
| Can stay invested for 3-5 years | Reduces impact of volatility |
| Prefer digital investing | Zero storage or purity issues |
| Can handle medium-high risk | Prices can move sharply |
Silver ETFs are not for those who want guaranteed or fixed returns, or who panic easily with market fluctuations. They suit tech-growth believers, young professionals, and long-term planners far better.
Risks to Consider Before Investing in Silver ETFs
Investing in a silver ETF can be rewarding, but investors should first understand the risks involved. Here’s a clear breakdown of what to keep in mind:
High Price Volatility
Silver prices can move up and down very quickly. They depend heavily on global factors like tech demand, industrial growth, inflation worries, and geopolitical news. So, the value of your investment may fluctuate more than traditional assets like gold or debt funds.
No Regular Income
Silver does not generate:
- Interest
- Dividends
- Rental income
Returns depend only on price movement. So, if silver prices stay flat for a while, your investment may also not grow during that time.
Tracking Error Risk
Even though the fund holds physical silver, its return may not perfectly match market prices. This difference called tracking error can occur due to:
- Fund management costs
- Physical storage expenses
- Import and logistics charges
Funds with lower tracking error are usually preferable.
Global Supply & Currency Influence
Silver is a globally traded commodity. Prices can be affected by:
- Mining disruptions
- Demand from solar & EV sectors
- US dollar strength/weakness
- Indian rupee fluctuations
Even if global prices fall, domestic prices may stay high if the rupee weakens.
Liquidity Differences Between Funds
Not all silver ETFs have the same buying and selling activity. Large funds like Nippon India Silver ETF are usually liquid. Smaller funds may have wider price spreads, making them slightly costlier to trade instantly.
Thus, Silver ETFs are better suited for investors who:
- Understand market swings
- Don’t expect guaranteed or fixed returns
- Can hold the investment patiently during volatility
They offer strong potential, but only when investors are ready for the risks that come with it.
How to Invest in Silver ETFs in India (Step-by-Step Guide)
Investing in a silver ETF is very easy and fully digital. If you have a Demat + trading account, you’re already ready to begin. Here’s a step-by-step guide for first-time investors:
Step 1: Open a Demat & Trading Account
If you don’t have one already, choose a SEBI-registered broker (online or offline). This account allows you to buy, hold, and sell ETF units.
Step 2: Search for a Silver ETF
Type the fund name or symbol in your brokerage app.
Example symbols you’ll commonly see:
- Nippon India Silver ETF → SILVERBEES
- ICICI Prudential Silver ETF → ICICISILVER
- HDFC Silver ETF → HDFCSILVER
Make sure you select the correct fund before buying.
Step 3: Check Key Details
Before placing an order, quickly review:
- Current market price
- Expense ratio
- AUM (the bigger, the better liquidity)
- Chart movement
If the price is slightly higher or lower than usual, you can wait for a better entry.
Step 4: Place Your Buy Order
You can place:
- Market Order (buy instantly at current price), or
- Limit Order (buy at a specific price you choose)
The units will be credited to your Demat account after execution.
Step 5: Track Performance Regularly
Monitor:
- Price changes
- Industrial demand trends
- Fund expenses and tracking error
Silver can be volatile, so avoid checking prices every hour. Review performance occasionally with a long-term mindset.
Step 6: Sell Anytime You Want
Just like shares, you can sell your silver ETF units through the broker app during market hours.
The amount gets credited to your linked bank account after settlement (usually T+1/T+2 days).
Taxation Rules for Silver ETFs in India (2025)
How Silver ETFs Are Classified
For tax purposes, a silver ETF is treated more like a non-equity investment (similar to commodity or debt-type funds) rather than a straight equity fund. This means the holding period, tax rates and benefits differ from equity‐oriented funds.
Holding Period & Tax Treatment
- Short‐Term Capital Gains (STCG): If the investor sells units of the silver ETF within 12 months (1 year) of purchase, the profit is treated as short‐term and is taxed as per the investor’s income tax slab rate.
- Long‐Term Capital Gains (LTCG): If the units are held for more than 12 months, the gains are taxed at a flat rate of 12.5% (plus applicable surcharge/cess) for sales after April 1, 2025.
Why These Rules Matter
- Holding the ETF for more than 12 months can lead to a lower tax rate (12.5%) instead of your full slab rate.
- Shorter holdings will be taxed at a potentially much higher rate if the investor falls in a higher tax slab.
- Since silver ETFs don’t benefit from indexation (in most cases) and don’t enjoy equity fund LTCG treatment, planning the holding period is key.
Important Notes for Investors
- Even though the rule says “more than 12 months”, the date of purchase and date of sale both matter for applying the LTCG rate.
- Some old rules (before the recent amendment) had different holding periods, so verify your purchase date and whether the new rules apply to your case.
- Dividends (if any) from silver ETFs are taxed as per normal slab rate since they form part of your taxable income.
Summary
For busy professionals considering a silver ETF:
- If you hold for over 12 months, expect a flat 12.5% tax on gains.
- If you sell within 12 months, gains are taxed as per your income slab (which could be significantly higher).
- Plan your investment horizon accordingly, the tax benefit makes a difference.
- Keep tax timing in mind when you review your “when to sell” decision.
Bottom Line
Silver has emerged as one of the most interesting themes in 2025, driven by strong industrial demand from sectors like electric vehicles, solar energy, and electronics. For Indian investors who want to benefit from this long-term growth story without dealing with physical silver, a silver ETF offers a modern and convenient solution. It provides price exposure to real silver, with no issues related to storage, purity, or making charges.
The performance of silver ETFs over the past year has been impressive, but investors should remember that silver is a high-volatility asset. Prices can move sharply, both upwards and downwards. That’s why silver ETFs should be a part of a well-diversified portfolio rather than a standalone investment.
They work best for investors who can stay invested for at least 3-5 years, understand the risks, and want exposure to a commodity that benefits from global technology growth. As always, checking expense ratios, liquidity, AUM, and tracking error before selecting a specific fund is important.
In simple words, a silver ETF can add shine to your portfolio, but only when chosen smartly and held patiently for the long term.
Disclaimer: Investments in the securities market are subject to market risks, read all the related documents carefully before investing. The securities are quoted as an example and not as a recommendation.
FAQs
Which is the best silver ETF to invest in?
There isn’t a single “best” option for everyone. Investors usually compare performance, AUM (liquidity), expense ratio, and tracking error before choosing a silver ETF that fits their personal goals and risk preference.
What is the biggest silver ETF?
As of the latest available figures, Nippon India Silver ETF is among the largest in India in terms of AUM, which generally indicates higher liquidity. Still, investors should check the most recent AUM data as it changes over time.
What are the disadvantages of silver ETFs?
The high volatility in the price of silver can become a major disadvantage during adverse market conditions. The liquidity in silver ETFs is comparatively lower than many other market-linked investment options, making it slightly challenging to enter and exit positions.
Is Tata Silver ETF good?
Tata AMC is a reputed fund house. Whether the Tata Silver ETF is suitable depends on what an investor values; brand comfort, cost structure, past performance, and how well it tracks silver prices.
