Rising silver prices not only increase investment demand but also open the door to an increase in impure silver bullion and coins in the Indian market. This trend has raised concerns from industry stakeholders about the spread of counterfeiting and lapses in quality standards.
Precious metal refiners have now intensified their calls for the Bureau of Indian Standards (BIS) to impose mandatory labeling on silver products, arguing that stronger safeguards are needed to protect consumers.Besides, they also demanded compulsory licensing of silver refineries to improve oversight, tighten quality control and bring greater transparency in the sector, according to ET. Although silver hallmarking has become mandatory from September 2025, industry executives say compliance is still weak, with a large section of jewelers yet to adopt the requirement. According to James Jose, president of the Precious Metals Refiners Forum, a significant portion of silver bars and coins sold in the retail markets fail to meet the required purity standards. He said: “Field studies indicated that the majority of silver products available in the market contain banned elements such as nickel, cadmium and lead.” “Nowadays, a lot of new silver jewelry is made from scrap silver without properly refining it.
Only a certain amount of pure silver bullion is mixed with scrap to achieve the desired level of purity. Industry centers such as Jaipur, Agra, Salem, Rajkot, Kolhapur and Cuttack continue to play a central role in the production of silver jewelery and handicrafts in the country. India’s annual silver consumption is approximately 7,000 tonnes, yet quality testing infrastructure remains limited, with only 286 silver screening and grading centres.
This contrasts sharply with gold, which has 1,595 positions despite a decline in annual consumption of around 800-850 tons. Stakeholders argue that this gap in testing infrastructure, coupled with the use of scrap silver in manufacturing, has allowed unsafe elements such as lead and cadmium to enter jewelry and artefacts. More than 50% of the silver sold in India is in the form of items such as cult items, lamps and utensils, further widening concerns regarding purity standards. The Precious Metals Refiners Forum also highlighted that silver offerings made at temples are often below acceptable quality levels. It has been suggested that wider availability of premium silver bullion from certified refineries could help address these issues and boost confidence in the market. Meanwhile, commodity exchanges including MCX, BSE and NSE are gearing up to introduce quality certified silver bullion through their trading platforms, with an aim to consolidate supply. “India needs world-class silver refineries to supply commodity exchanges with asset class silver bullion,” Jose said. He added that several BIS-licensed gold refineries are already involved in silver refining and are waiting for a formal BIS licensing framework specifically dedicated to silver.