In terms of precious metals, India's claim to fame has long been its status as the world's biggest gold consumer.a However, recent data released by both the World Gold Council (WGC) and the Indian government suggests that it won't be long before the country is known for its consumption of another precious metal: silver. a India's seat at the top of the gold consumption podium has been shaky for some time. At the beginning of last year, Gold Investing News reported that according to Marcus Grubb, managing director of investment at the WGC, China was likely to emerge as the largest gold market in the world for the first time in 2012. While that didn't happen, Grubb now believes that 2013 will be the year that China takes the lead. He told Bloomberg this July, "Chinaawill probably be the world's biggest gold consumer this year for the first time on an annual basis.aThat will be driven by both jewellery and investment demand. Jewellery will be the biggest overall demand segment, but investment will grow fastest." The other side of the equation is Indian silver demand, a topic first discussed by Silver Investing News (SIN) in July. At the time, SIN reported that as per Sprott Asset Management's Eric Sprott and David Franklin, India imported 2,400 metric tons (MT) of the white metal in the first five months of 2013, a significant figure given thataIndia's record for silver imports, in 2008, is 5,048 MT. Last week, Franklin was back with more silver import numbers from India. In an article published on October 8, he notes that the most current import data from the Indian government shows that India imported US$1.78 billion worth of silver during the second quarter, up a whopping 311 percent from the year-ago period. That means the country brought in 3,015 MT of the white metal in the first half of the year, "putting Indians on track to import more than 6,030 tonnes of silver this year."
Even more impressively, Franklin notes that according to the Silver Institute, 24,478 MT of silver were produced worldwide in 2012; that means that as things stand, India is set to import 25 percent of the world's mined silver this year.Future prospects As Sprott and Franklin explained in July, Indians have historically gravitated toward gold because they have limited access to banks anda"owning precious metals is synonymous with savings and security." Yet as a result of taxes and import restrictions, "the majority of Indian investors" — excluding larger investors — have switched over to silver. Writing for Seeking Alpha last week, Moneyline reported that moving forward, those factors will continue to push up Indian silver demand. However, a number of others are now also in the picture. For instance, "a general scare in the market that the government might soon start curbing silver imports also" is causing investors to stock up on silver. Those interested in the white metal are also reportedly taking advantage of its low price point. For his part, Franklin quotes RobertaPrior-Wandesforde, head of regional economics at Credit Suisse, who believes that Indian demand for precious metals, particularly silver, will continue to be driven this year by stronger purchasing power brought about by the fact that 2013 is turning out to be a bumper year for Indian crops. As can be seen, Franklin and Moneyline believe there is little question that in India, silver is indeed set to overthrow gold in popularity. Butawhat does that mean for investors elsewhere? Answering exactly that question, Franklin states that he believesasilver prices will "shortly" catch up to the reality of demand, meaning that now is the time wake up to "the market opportunity in silver." Do you agree?aTell us what you think of Franklin's forecast in the survey below.View This Poll
Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.a Related reading:a Will India Remain the Largest Gold Consumer in 2012? Will Indian Silver Imports Reach a Record in 2013? Survey: Will India's Silver Market Takeover Push Prices Up? from Silver Investing News