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India's silver imports rise 88% on yr to 1,200 tn in Jan, say trade sources
This story was originally published at 14:34 IST on 25 February 2025
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By Sandeep Sinha
MUMBAI – Silver imports into India are likely to have surged 85-88% to 1,180–1,200 tonnes in January from 636.78 tonnes a year ago, as rising prices of gold made consumers look at cheaper alternatives in the form of silver jewellery, according to trade and industry sources.
"The increase in silver imports indicates a consumer shift towards more affordable precious metals. This suggests increased demand for silver jewellery, coins, and investment products as a substitute for gold. As gold has risen to record high levels, jewellers and traders have stocked/bought silver in expectation of further price increases in the coming months," said Renisha Chainani, research head of Augmont Goldtech Pvt. Ltd, an export house.
Surendra Mehta, national secretary of the India Bullion and Jewellers Association, said the threat of reciprocal tariffs by the US was keeping silver prices high. The price of the commodity on the Multi Commodity Exchange of India surged nearly 7%, or INR 6,095, to 93,328 per kg in January. The price had hit an all-time high of INR 100,081 per kg on Oct. 23. At 1225 IST Tuesday, the most-active March contract on the MCX was up 0.4% at INR 95,510 per kg.
Trade data released by the commerce ministry on Feb. 15 showed that the value of silver imports rose 82.8% on year to $483.02 million in January. The ministry will release data on the quantum of imports later.
According to trade sources, India imported 30-36 tonnes of gold in January, compared with 35.7 tonnes a year ago.
"The decline reflects weaker demand due to record high gold prices and a shift in consumer behaviour. Consumers are preferring lighter designs and lower caratage (14-carat, 18-carat) to manage costs. Demand for antique, temple, and fusion jewellery is increasing as these styles use less gold but maintain aesthetics," Chainani said. More customers are opting to exchange old gold jewellery instead of buying new pieces, she said.
It was surprising that India imported 36 tonnes of gold in January despite gold prices being at all-time highs, Mehta said. "This in spite of the fact that jewellery demand is badly hit as consumers are preferring to stay away from market due to high prices. It clearly means that investment demand for gold still exists and we should focus on exchange-traded funds number and bullion sales." Investment in ETFs is rising, and demand for gold coins and bar remains strong.
The value of India's gold imports rose 40.8% on year to $2.69 billion in January. The country imported gold bars worth $386.17 million during the month, down 18.1% from a year ago, according to latest data from the Gems and Jewellery Export Promotion Council. It also imported $31.64 million of gold jewellery in January, down from $272.93 million a year ago, the data showed.
Chainani said that jewellers were promoting gold buyback schemes to attract budget-conscious buyers. Farmers and small businesses were postponing purchases or opting for smaller-ticket investments. Millennials and urban buyers prefer paper gold to physical jewellery, and investors are shifting to digital gold and gold ETFs as safer, cost-effective alternatives, Chainani said.
Investment demand for gold is expected to remain strong, even as jewellery demand faces pressure from record-high prices, Kavita Chacko, research head for India, World Gold Council, said in a note. The financial year-end dynamics, which include statutory payments and tax-saving investments, might curtail spending on gold, further weighing on demand, she said.
India is the second-largest consumer and importer of gold after China. End
US$1 = INR 87.14
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Avishek Dutta
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