A silver trader weighs his silver ornaments inside his shop in the western Indian city of Ahmedabad, India. Reuters

Higher demand in India, the world’s biggest silver consumer, could support global prices trading near their highest in three years.

India imported a record 2,295 metric tonnes of silver in February, up from 637 tonnes in January, said a government official, who declined to be named as he was not authorised to talk to the media.

In February, India imported 939 tonnes from UAE, as traders bought large volumes to benefit from a lower duty, the official said.

The country’s silver imports surged to 2,932 tonnes in the first two months of 2024 compared to 3,625 tonnes for all of 2023, according to provisional data from the Ministry of Commerce and Industry.

The imports in the first two months of 2024 were much more than required and pushed Indian prices into a discount, forcing banks to nearly stop imports in March, a Mumbai-based dealer with a private bullion importing bank said.

Chirag Thakkar, CEO of Amrapali Group Gujarat, a leading silver importer, said the industry had replenished stocks in January and February after having depleted them in 2023.

“Indian imports are cyclical in nature. In one year, imports may be very high, and then the following year they may fall. Since imports fell in 2023 after record buying in 2022, we can expect imports to pick up in 2024,” Thakkar said.

India’s imports could rise to 6,000 tonnes in 2024, from last year’s 3,625 tonnes, driven by robust demand from the fabrication and solar industries, he said.

Thakkar said people were also buying metal for investment purposes, believing it will provide higher returns than gold.