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December 23, 2024
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Silver

India’s Silver Imports to Skyrocket as Investment Shifts and Duty Cuts Boost Demand


India’s silver imports are poised to nearly double this year, driven by a surge in demand from solar panel and electronics manufacturers, as well as a growing interest from investors seeking better returns than gold. This increase in imports is expected to have a notable impact on global silver prices, which are nearing their highest levels in over a decade.

Visual and Emotional Appeal

The dramatic rise in silver imports reflects a significant shift in both industrial and investment trends. With India, the world’s largest silver consumer, ramping up its purchases, the global silver market is experiencing heightened activity. This shift is not only shaping market dynamics but also influencing investment strategies, making silver an increasingly attractive asset.

Key Moments

  • Import Surge: India’s silver imports, which stood at 3,625 metric tons last year, are projected to reach between 6,500 and 7,000 tons this year.
  • Duty Cut: In July, India reduced import duties on silver from 15 percent to 6 percent, aiming to curb smuggling and boost affordability.
  • Record Prices: Local silver futures hit a record high of 96,493 rupees ($1,151) per kilogram in May 2024.

Details About the Narrative

According to Chirag Thakkar, CEO of Amrapali Group Gujarat, a prominent silver importer, the sharp increase in imports is driven by robust industrial demand and a shift in investment patterns. India’s silver imports for the first half of 2024 surged to 4,554 tons, compared to just 560 tons during the same period last year. This unprecedented growth highlights a significant shift in both market demand and investment behavior.

Thakkar noted that the recent reduction in import duties has made silver more accessible, further stimulating demand. The cut, which reduced duties from 15 percent to 6 percent, was implemented to address smuggling issues and make silver more competitively priced. This move has been instrumental in boosting investment interest, as investors seek better returns compared to gold, which has seen a 13 percent increase in prices this year.

Local silver futures have experienced a remarkable increase, with prices reaching an all-time high in May and showing a 14 percent rise so far in 2024. This performance underscores the metal’s growing appeal as an investment.

Important Points

  • Demand Drivers: Increased industrial usage and investment interest are key factors driving up silver imports.
  • Import Projections: Imports could rise from 3,625 metric tons last year to between 6,500 and 7,000 tons in 2024.
  • Duty Reduction: Import duties on silver were cut from 15 percent to 6 percent in July 2024 to combat smuggling and improve affordability.
  • Price Trends: Local silver futures have hit record highs and are up nearly 14 percent in 2024, surpassing gold’s 13 percent increase.
  • Sources: India primarily sources silver from the United Arab Emirates, Britain, and China.



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