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India's young population has a clear affinity towards silver, as opposed to the yellow metal. As per a report by Silver institute, 78% of silver jewellery is bought by people aged 20-50.
Following a boom in silver metal exports, Indian banks have approached the Reserve Bank of India to formulate a loan framework akin to the existing gold metal loan policy. The demand rides on a 15.92% Y-O-Y growth in silver jewelry exports in India, between 2021-2023.
The country exported silver jewellery worth Rs 20,337.52 crore in 2021-22. This rose to Rs 23,574.67 crores in 2022-23, per data from Gems and Jewellery Export Promotion Council (GJEPC),
Silver is the new gold?
Perhaps, yes. India’s young population has a clear affinity towards silver, as opposed to the yellow metal. As per a report by Silver institute, 78% of silver jewellery is bought by people aged 20-50. The same report also pegs India’s untapped silver export potential at an astounding $1.8 billion.
Such is the demand for silver in India, that the country hit a record high in terms of importing the metal, bringing in 8,800 tonnes last year.
As per GJEPC, India imported silver worth Rs 493.03 crores in 2021-22, which grew 69.96% in a single year to stand at Rs 837.95 crores in 2022-23.
What are banks seeking?
Jewellery manufacturers want an increased credit line for procuring silver and associated articles, similar to what exists for gold.
The gold monetization scheme, 2015 allows specific banks to give gold loans to exporters and jewelry manufacturers.
This loan, equal to the value of gold borrowed, should be repaid in rupees. However, a part of this loan can also be paid back in physical gold. Jewelry exporters are looking for a similar scheme for silver.