Surge in India's Silver Imports Fuels Record Prices

India's silver imports are set to nearly double this year because of rising demand from the solar and electronics industries, as well as investor interest. This surge in demand has driven local silver futures to record highs. Import duties were recently cut, boosting affordability and increasing import volumes.

India's silver imports are projected to nearly double this year, spurred by growing demand from the solar panel and electronics sectors, and increased investor interest, leading importers revealed Friday.

The world's largest silver consumer may see import volumes rise to between 6,500 and 7,000 tons, up from 3,625 metric tons last year, according to Chirag Thakkar, CEO of Amrapali Group Gujarat.

In the first half of 2024, silver imports surged to 4,554 tons, compared to just 560 tons a year ago. This rise follows a duty cut on silver imports in July, making it more affordable and spurring investment demand, said Thakkar.

India reduced import duties on silver from 15% to 6%, addressing smuggling concerns. According to Thakkar, investor demand has been "phenomenal" this year, driven by the expectation that silver will yield better returns than gold.

Local silver futures reached a record high of 96,493 rupees ($1,151) per kilogram in May and have risen nearly 14% in 2024, topping gold's 13% increase. Due to depleted inventories in 2023, industrial buyers are stockpiling silver to hedge against rising prices.

India primarily imports silver from the UAE, Britain, and China. ($1 = 83.8650 Indian rupees)

(With inputs from agencies.)