Massive Increase In India's Silver Imports; Surpass Last Year's Qty In Jan-April

New Delhi, June 1 (KNN) India's silver imports have soared in the first four months of 2024, already exceeding the total imports for the entire previous year. 

According to a government official, India imported 4,172 metric tonnes of silver from January to April, up sharply from just 455 tons in the same period in 2023. Last year, India's total silver imports were 3,625 tonnes.

The meteoric rise in imports has been driven by a combination of industrial demand and investor optimism in the precious metal. 

"Silver prices have witnessed a significant jump of over 25 per cent this year on both the Comex and domestic markets," said Navneet Damani of Motilal Oswal Financial Services. "This move has been fueled by factors like expectations of interest rate cuts, geopolitical tensions, mixed U.S. economic data, and a sharp rally in industrial metals supporting silver."

A key driver has been industrial demand, particularly from India's rapidly growing solar panel industry which uses silver in photovoltaic cells. 

As India expands its solar energy capacity to meet renewable targets, the appetite for silver remains robust.

Investor sentiment has also played a role, with some investors betting that silver could soon outperform gold. 

The combination of demand and consumption has led prices to record highs in 2024, spurring the historic spike in imports.

While India levies a 15 per cent import duty on silver, a trade pact with the UAE allows private traders to import via an exchange at a 9 per cent duty plus 3 per cent VAT. This has facilitated easier access to global silver supplies.

However, market watchers expect the torrid pace of imports to moderate as industries work through stockpiles accumulated earlier this year. 

But India's strategic position in global silver markets makes its import patterns a closely watched indicator worldwide.

(KNN Bureau)