India’s silver imports fell sharply in May, declining 82% from a year earlier after a steep increase in import duties dampened demand for the precious metal, according to official trade data.
The sharp drop underscores the impact of higher import costs on one of the world’s largest silver-consuming markets, where demand is driven by jewellery, investment products and industrial applications.
Imports record steep decline
Government data showed that India’s silver imports fell to 290.2 metric tonnes in May, down from 1,619.4 metric tonnes in the same month last year. The decline marked one of the sharpest year-on-year contractions in recent months.
The fall follows a slowdown that had already begun earlier in the year, with imports showing signs of weakness after changes in the country’s import duty structure.
Duty hike weighs on demand
Market participants attributed the decline largely to the increase in import duty on silver. The higher tax burden raised the landed cost of imports, making purchases less attractive for traders, jewellers and industrial consumers.
The duty increase was introduced as part of broader government efforts aimed at influencing import trends and supporting domestic economic objectives. Analysts said the move had an immediate impact on buying activity, particularly among importers holding sufficient inventories.
India remains a major silver consumer
Despite the decline in imports, India continues to rank among the world’s largest consumers of silver. The metal is widely used across multiple sectors, including jewellery manufacturing, silverware production, electronics, solar equipment and investment products.
Demand for silver in India is influenced by a combination of industrial activity, festive-season purchases, retail investment trends and international price movements.
Industry monitors future demand
Traders and industry participants are closely watching market conditions to assess whether imports will recover in the coming months. Factors such as domestic demand, global silver prices, inventory levels and government policy decisions are expected to play an important role in determining future import volumes.
The latest trade figures highlight the sensitivity of precious metal imports to changes in taxation and policy measures. While demand remains an important driver of the silver market, higher import costs have significantly altered purchasing patterns in the short term.
The May data reflects the continuing adjustment by market participants to the revised duty structure, with imports remaining under pressure as buyers reassess procurement strategies.
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