The prices of the white metal after consistently scaling new heights, the highest among all investments, have now been looking ahead to the Union budget to continue the upward momentum. The heavy buying in silver can be attributed, in India, to the piling of white metal by jewellers to meet the expected demand during festival seasons.
But in the past few years, the buying in silver could be traced to the shifting of funds from the weakening equities to the shining bullion market.
Also, investment in precious metals like silver offer a buffer against inflationary concerns due to rising oil prices amid fears of escalating tensions between Iran and the US.
Amidst such silver opportunities, the move to raise import duty on white metal could be a setback for investors. The world's biggest importer of silver raised the import duty to 6% of value as against Rs 1,500 per kilogram levied earlier.
Also the government had raised the import duty on gold to 2% of value from the earlier practice of charging Rs 300 per 10 gram.
Now as the silver is already used across various industries, there is a chance to lower the import duty for now so as to make India's goods cheaper and competitive globally.