India looks to Peru, Chile FTAs to diversify silver supplies amid China export curbs

Last year, silver surged nearly 150 percent due to a combination of factors, including supply constraints, robust industrial and investment demand, and supportive macroeconomic conditions.

• India expands FTA talks with Peru, Chile to secure silver amid China export limits.
• India's silver demand rises due to green energy and EVs, increasing import reliance
• FTAs aim to diversify supply, cut costs, and stabilize silver imports for industry

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Not just critical minerals, silver, too, has emerged as a key item in India’s ongoing free trade agreement talks with Peru and Chile, as New Delhi looks to secure supplies after China imposed export curbs on the precious metal from January 1, a government official told Moneycontrol.

India had been in talks with the Latin American nations with a focus on securing critical minerals but Beijing’s move has expanded the scope of the talks to include silver as well.

China produces 60–70 percent of global refined silver and its share of import to India has been growing steadily. The demand for the metal has surged due to growing use in green energy and EVs amid persistent global supply deficit. Both Peru and Chile are major global producers of silver.

China has not announced a blanket ban on silver shipments, it has imposed a tighter approval-based export regime. Only 44 companies have been authorised to export the precious metal under the new framework for 2026 and 2027.

“Silver is not such a big challenge in terms of availability,” the official said, adding India can source significant quantities from countries such as Peru and Chile.

Diversifying supply

Proposed FTAs with Peru and Chile could secure silver by eliminating tariffs and reducing customs barriers, lowering costs and ensuring faster, more reliable imports.

Diversifying supply of silver is crucial since India now sources more than 40 percent of imports in these categories from China, up from about a third in 2019 and a quarter a decade ago.

China’s share in India’s silver imports hovered around 34–35 percent between 2013 and 2019. That reliance jumped above 44 percent during 2020–21, when covid pandemic-related disruptions forced many countries to realign supply chains, and has remained elevated since.

The rise to 42.2 percent in 2025 suggests that India has not meaningfully diversified its sourcing, even as silver’s importance to the economy has grown.

India’s overall silver imports rose to $4.83 billion in FY25 from $4.46 billion in FY24, underscoring the growing importance of the metal amid rising industrial and investment demand.

The precious metal has become more crucial as it is now a key industrial input, with solar manufacturing accounting for about 17 percent of global demand by 2025, up from under 10 percent earlier in the decade. Electrical and electronics applications consistently make up roughly a quarter.

This growing industrial reliance, combined with concentrated sourcing, means that any supply disruption, price shock or export curbs would have far-reaching consequences well beyond the bullion market.

Official said improved market access under the trade agreements would help offset China’s restrictions and stabilise supplies for India’s industrial and solar panel manufacturing needs.

A silver bullet?

Figures from Peru’s energy and mines ministry shows the country produces over 3,000 tonnes of silver annually, consistently ranking it among the top three global producers.

In Chile, state-linked data tracked by the Chilean Copper Commission (Cochilco) indicates annual silver output of roughly 1,200–1,400 tonnes, largely generated as a by-product of the country’s extensive copper mining operations.

With Peru, negotiations on a proposed FTA have advanced through nine rounds of talks, with the latest held in Lima in November.

Progress was made on key chapters, including trade in goods and services, rules of origin, customs procedures, dispute settlement, and critical minerals. Both sides have agreed to continue with further rounds, with the next slated for New Delhi in early 2026.

India is negotiating a Comprehensive Economic Partnership Agreement (CEPA) with Chile, which builds on an existing preferential trade arrangement.

The fourth round of CEPA negotiations was completed in December, covering a range of issues, including market access and critical minerals. An industry source said, “While negotiations on the proposed trade agreement with Peru could take longer, talks with Chile are close to being concluded.”

The official cited above said while availability itself is not a major concern, the bigger challenge has been rising prices driven by global hoarding, with countries such as Saudi Arabia accumulating the metal from international markets.

Silver rose nearly 4 percent to $76 for an ounce on January 5, extending gains from the previous session after the US attacked Venezuela and arrested President Nicolas Maduro over the weekend, heightening geopolitical risks and boosting demand for safe-haven metals.

Last year, silver surged nearly 150 percent due to a combination of factors, including supply constraints, robust industrial and investment demand, and supportive macroeconomic conditions.

China’s export restrictions have worsened the structural supply deficit.