India's Silver Imports Set to Double Amid Industrial and Investment Demand

India's silver imports are projected to nearly double in 2024, according to leading importers. This surge is attributed to rising demand from solar panel and electronics manufacturers, as well as increased investor interest in the precious metal.

Chirag Thakkar, CEO of Amrapali Group Gujarat, a major silver importer, estimates that this year's purchases could reach between 6,500 and 7,000 tons. This significant increase is primarily due to growing industrial demand. In comparison, India imported 3,625 metric tons of silver in 2023.

The first half of 2024 has already seen a substantial rise in silver imports, reaching 4,554 tons compared to 560 tons during the same period last year, as reported by trade ministry data. This dramatic increase can be partially attributed to the Indian government's decision to reduce import duties on silver from 15% to 6% in July 2024, a move aimed at curbing smuggling activities.

Thakkar noted that investment demand for silver has been "phenomenal" in the first half of the year, with investors anticipating better returns compared to gold. Local silver futures hit a record high of 96,493 rupees per kilogram in May 2024, and have shown a nearly 14% increase so far this year, slightly outperforming gold's 13% rise.

The surge in silver imports is not solely driven by investment demand. Industrial buyers have been stockpiling the metal due to depleted inventories in 2023 and concerns over rising prices. Silver's unique properties make it essential in various industries. It is the most electrically conductive element, making it crucial for electronics and solar panel production. Additionally, silver's natural antibacterial properties have led to its use in water purification systems on spacecraft and in some clothing to reduce odors.

India, as the world's largest silver consumer, primarily imports the metal from the United Arab Emirates, Britain, and China. The increased demand from India is likely to provide further support to global silver prices, which are currently near their highest levels in over a decade.

It's worth noting that silver has a rich history as a precious metal. It has been used as currency for over 4,000 years, and the ancient Egyptians considered it more valuable than gold. The word "silver" itself comes from the Anglo-Saxon word "seolfor", while its chemical symbol, Ag, is derived from the Latin word "argentum".

As India's silver imports continue to rise, it's clear that the metal's importance in both industrial applications and investment portfolios is growing. With its diverse uses ranging from traditional jewelry to cutting-edge technology, silver's role in the global economy remains significant.

"There is a traditional demand for jewellery. People are also buying for investment purposes now that the duty cut has made silver more affordable."