India imported a record 4,172 metric tons of silver during January to April, up from 455 tons in the same period a year ago, said a government official, who declined to be named as he was not authorized to talk to the media.
India imported a total of 3,625 tons of silver last year.
“Industrial and investment demand are driving up silver imports,” said a Mumbai-based dealer with a private bullion importing bank.
“Silver prices haven’t done as well as gold in the past decade, but investors think it will do better than gold this year.”
Local silver futures hit a record high of 96,493 rupees ($1,158.01) per kilogram on Wednesday and are up nearly 28% so far in 2024, comfortably outperforming a 14% increase in gold prices.
Almost half of this year’s imports have come from the United Arab Emirates to take advantage of lower import duty, said an importer based at Ahmedabad in Gujarat.
India generally imposes a 15% import duty on silver. However, the Comprehensive Economic Partnership Agreement, signed between India and the UAE in 2022, allows private traders to import silver through the India International Bullion Exchange (IIBX) paying 9% duty, and an extra 3% in value added tax.
In the past few months excessive imports were made and silver is trading at a discount in India, said the Ahmedabad based importer.
“In the coming months, silver imports will slow down. First, the industry will try to consume the already imported metal,” he said.
($1 = 83.3264 Indian rupees)
(Reporting by Rajendra Jadhav; Editing by Kirsten Donovan)