India’s leading mutual fund companies have temporarily stopped accepting new investments in their silver exchange-traded funds, responding to acute shortages of physical metal and elevated domestic pricing.
Tata Mutual Fund, SBI Mutual Fund, UTI Mutual Fund, Kotak Mutual Fund, and Axis Mutual Fund announced the restrictions between October 9-14, 2025. The suspensions affect new lump-sum purchases and systematic investment plan registrations in silver ETF fund-of-funds products.
“Due to prevailing market conditions and shortage of physical silver in the domestic market, silver is trading at a premium relative to international prices,” Tata Mutual Fund said in an investor notice, adding the halt would remain “until further notice.”
Market data shows Indian silver prices currently trade 5-12% above international import-parity levels, causing ETF share prices to exceed their underlying asset values. Existing investments and withdrawals continue normally.
The restrictions arrive as global silver markets experience historic volatility. Prices reached approximately $53 per ounce on October 14, marking a 69% gain for the year. London borrowing costs for physical silver surged to 35-39% last week, signaling acute tightness in global wholesale trading.
Multiple factors drive the tightness: expanding industrial consumption in solar energy and electric vehicle manufacturing; substantial inflows to physically-backed investment funds; and metal transfers from London to New York as traders respond to US tariff uncertainty following Washington’s August designation of silver as a critical mineral.
Fund companies characterized their actions as investor protection, preventing new participants from entering at elevated valuations. The measures apply solely to fresh subscriptions; scheduled investment programs remain active.
Supply has trailed demand for five straight years, with 2025 forecasts projecting another shortfall, according to industry research organizations.
Separately, social media posts incorrectly claim Australia’s Perth Mint suspended silver sales. The mint’s official website confirms “gold and silver sales continue as usual,” noting only that high demand causes processing delays. Perth Mint’s September 2025 sales data, published in its monthly report, documents shipments of 578,588 ounces of silver.
Information for this story was found via Bloomberg, and the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
