Normal monsoon not only augurs well for the Indian agriculture sector but also generate a bullish scenario for silver as out of total demand for the white metal in the country, 60% is contributed by the farming community.
According to industrial experts, silver imports get boosted in tandem with better monsoon as Indian farmers prefer silver bangles and other jewelries to save their earnings.
Usually, rural households subsist on agriculture and normal monsoon is good news for them, which eventually boost the buying capacity of farmers.
India's silver imports have declined sharply due to higher prices. The silver imports are estimated to have fallen to 300-500 tons in the January-June period from 600 tons a year earlier, an industrial official said.
Bombay Bullion Association President Suresh Hundia opined that the silver imports are likely to move up to nearly 1,500 tons this year, from around 1,200 tons last year.
But silver imports would still be sharply lower than the 3,000-4,000 tons purchased couple of years ago, as prices have jumped to current record levels of 30,000 rupees per kilogram.
The country so far imported around 300-500 tons of silver. In the last five financial years, silver import value aggregated $4.5 billion.