India has become the world's largest importer of silver and its second largest user. According to the World Silver Survey released here, the "escalating demand in India represented the most dramatic development in the silver market" in 1996 and propelled India ahead of Japan but behind the US as the world's largest fabricator of silver.
In 1996, imports jumped nearly 40 per cent to a record 113.5 million ounces of silver, nearly 10 per cent above the previous record set in 1993. Since 1990, when silver controls ended, India has imported more than 520 million ounces of silver. In 1993, India also legalised import of silver.
The fabrication demand for silver grew by 31 per cent to 129.60 million ounces, making India the second largest user of silver in the world.
The US, with a demand of 150.66 million ounces, retained the top spot. Japan slipped to third place with an aggregate demand of 112.11 million ounces.
The survey noted that the "overall increase in offtake could be accounted for essentially by the jewellery and silverware of just two countries-India and Mexico, with a somewhat smaller contribution from industrial uses in China."
The world silver survey is published by the Washington-based Silver Institute since 1990. The survey was conducted by the London-based Gold Fields Mineral Services, which also produces the Gold Survey.
Worldwide demand for silver rose by a robust 4.5 per cent to 803 million ounces last year, the survey noted.
The sharp and dramatic increase in the demand for silverware and jewellery in India was attributed to a number of factors.
Acknowledging that the agricultural sector remains the main spring of Indian silver demand, the survey said, "First and foremost was the good harvest, particularly in the northern tribal belt, where heavyweight silver jewellery remains the favoured vehicle for farmers' investments."
"This, coupled with arising level of consumer demand for silverware in the cities, is credited for the increased consumption," it added.
The survey attributed the "surge in demand" in the second half of 1996 to a steep fall in the local price of silver. (India Abroad News Service)
