Silver imports into India totalled more than 100 million oz. in the first eight months of 1997 — a 50% increase over the same period last year, according to Gold Fields Mineral Services. And with further liberalization of silver imports by the government expected, Indian consumption is poised to increase to a still higher level.
In 1996, India was the world’s third-largest fabricator of silver, importing nearly all of its raw materials — a record 105 million oz. During the first eight months of 1997, imports reached 95% of the total consumption of 1996.
The government announced that it will allow the import of silver to be done through three agencies and eight banks already authorized by the Reserve Bank of India. These institutions will be permitted to buy unlimited amounts of gold for domestic retail sale; currently, they are allowed only to import silver for use by Indian jewelry-makers for export.
The move is designed to curb smuggling and provide incentives for Indian jewelers to produce more products for domestic consumption. The changes are also expected to help make the rupee more convertible for international transactions. Silver duty will be 500 rupees per kilogram.
Gold Fields’ findings suggest that lower local silver prices are only partially responsible for increased imports. The average silver price on the Bombay market for the first eight months of 1997 was 6,885 rupees per kilogram — only 5.6% lower than the 1996 average of 7,291 rupees per kilogram. Gold Fields’ report notes that, in addition to the lower price, growing rural economies and strong harvests have contributed to an increase in imports.
— The preceding is an excerpt from “Silver News,” a publication of the Washington, D.C.-based Silver Institute.
Be the first to comment on "FACTS ‘N’ FIGURES — Indian silver imports on rise"