India Slashes Silver Imports Amid Tightened Curbs, Global Impact Looms

India's silver imports decreased dramatically by 87% in May year-on-year due to stringent import regulations. Measures implemented to curb imports aim to reduce the trade deficit and ease pressure on the rupee. The move may influence global silver prices, with India historically importing over 80% of its silver.

In a striking downturn, India's silver imports plummeted 87% in May compared to the previous year, marking their lowest point in over three years. The decrease comes as the Indian government enforces tighter restrictions on nearly all forms of silver imports, according to data released Monday by the Ministry of Commerce and Industry.

This reduction in silver imports – a commodity for which India relies on foreign markets to meet over 80% of its demand – could potentially depress global prices. The policy shift aims to help narrow India's trade deficit and alleviate pressure on the rupee. In May, silver imports fell sharply to $75.57 million from $566.22 million a year ago, with volume dropping 94% to 33 metric tons.

India recently intensified restrictions, including placing silver grains and powder under a restricted category requiring prior authorization. Simultaneously, import duties on gold and silver were increased to 15% from 6%, striving to slash precious metal imports amid rising oil prices. A bank dealer noted, "There is demand, but imports have become difficult due to the restrictions, and local premiums have started to rise."