India witnessed a remarkable surge in silver imports in February, reaching an unprecedented 260 per cent increase, driven by lower duties that incentivized substantial purchases from the United Arab Emirates (UAE), according to reports from government and industry sources shared with Reuters. Projections suggest that this trend is set to continue, with a potential 66 per cent increase in imports for the year.
The surge in demand from India, the world’s largest consumer of silver, has the potential to bolster global prices, which are already trading near their highest levels in three years. Official data reveals that India imported a record-breaking 2,295 metric tons of silver in February, a significant jump from the 637 tons recorded in January.
A substantial portion of these imports, totaling 939 tons, originated from the UAE, as traders capitalized on the advantageous lower duty regime, as per the unnamed government official. The cumulative silver imports for the initial two months of 2024 stood at 2,932 tons, surpassing the total imports for the entirety of 2023, provisional data from the Ministry of Commerce and Industry indicates.
However, the influx of silver imports during the early months of 2024 exceeded demand, leading to a price discount in the Indian market. Consequently, banking institutions nearly halted imports in March, noted a Mumbai-based dealer associated with a private bullion importing bank.
Chirag Thakkar, CEO of Amrapali Group Gujarat, a prominent silver importer, highlighted the cyclical nature of Indian imports, underscoring that the surge in 2024 follows a downturn in 2023 after a record-breaking year in 2022. Thakkar predicts that imports could escalate to 6,000 tons in 2024, attributing the growth to robust demand from the fabrication and solar industries.
Furthermore, Thakkar pointed out that individuals are increasingly turning to silver for investment purposes, believing it to offer superior returns compared to gold.
