If the present trend of large monthly silver imports continues, Indian may be setting up for a record year in 2013. According to industry sources, Indian has already imported 2,400 tonnes of silver in the first 5 months of 2013 compared to 1,900 tonnes for the entire year in 2012.

If we look at the chart below, we can see that India imported a record 5,048 tonnes of silver in 2008. This was the year that silver hit a record high of $21 and record low at the $9 level. The Indians were importing record amounts as the price rose to its high in March that year, and they bought even more when it fell all the way to $9 in Oct. 2008.

As the world's economies slowed in 2009, industrial and investment demand declined until it started to picking up again in 2010 and even more in 2011. Here we can see that Indian's silver imports fell to 1,285 tonnes in 2009, but recovered to over 4,000 tonnes by 2011.

Ever since silver hit a record high of $49 in April of 2011, there has been a long slow grind lower over the past two years. Amazingly, the price of silver has fallen 62% since its high to reaching a new low of $18.50, this past Friday.

This caused world investment demand for silver to decline in 2012, shown by the big drop-off of Indian silver imports in 2012. There were a few news articles out the last month stating that even though the price of silver had fallen substantially in April, there didn't seem to be many Indian buyers.

However, it looks like things have indeed changed as silver demand is picking up. According to the article "Silver Prices Shoot Up as Prices move to multi-year Lows",

"Silver stock with several bullion traders were getting exhausted and when prices started falling from mid-April, they booked heavily anticipating demand at lower levels as prices have been falling," said Monal Thakkar, president, Amrapali Group, a leading Ahmedabad-based bullion wholesaler.

According to industry estimates, silver imports during the January-March quarter stood at 760 tonnes. Imports shot up 720 tonnes in April alone, and in May, they further swelled by 920 tonnes.

Monal Thakkar advises consumers and investors to start buying silver now as prices have fallen by almost half from the peak of Rs 75,000 two years ago.

If silver imports were 2,400 tonnes from Jan-May, and we estimate another 1,500 tonnes for June & July, that's nearly 4,000 tonnes of silver in only the first 7 months of 2013. Even if imports are more conservative throughout the rest of the year, India may still be on hits way of surpassing its record silver imports of 5,048 tonnes in 2008.