As Gold Turns Unaffordable, BIS Quietly Builds the Plumbing for a Bigger Silver Market

By the time silver crossed ₹4 lakh a kilogram in January 2026 — a level nobody in the trade had seen before — the Bureau of Indian Standards was already several months into a project that had little to do with price charts. Since September 2025, every silver jewellery piece that carries a BIS hallmark has also had to carry a Hallmark Unique Identification number, the same digital fingerprint that gold hallmarking has used since 2021. What began as a fairly technical revision to a testing standard is now looking, in hindsight, like preparation for a market the regulator could see coming before most retailers could.

That market has arrived. Gold that traded near ₹1,44,000 per 10 grams in early August has since jumped past ₹1,52,000, up roughly 49 percent over the past year. Silver has moved even faster — up more than 100 percent year-on-year and briefly touching an all-time high of over ₹4 lakh per kilogram earlier in 2026 before correcting to the ₹2.2-2.4 lakh range it has held through the monsoon months. Both metals are now trading at levels that would have seemed implausible three years ago, and the gap between what a household can afford and what a gram of gold now costs has widened enough to change how ordinary Indians shop for jewellery.

BIS's response has been to scale up the one piece of infrastructure that determines whether any of this silver buying happens on trustworthy terms: the network of Assaying and Hallmarking Centres that test purity before a piece can legally carry the BIS mark. That expansion, and the broader question of whether silver hallmarking should eventually become compulsory the way gold hallmarking already is, is the real story here — not a simple tale of buyers trading one metal for another.

The price story is more complicated than "gold got expensive"

It is tempting to describe this as a straightforward substitution: gold became unaffordable, so people bought silver instead. The data doesn't quite support that framing.

According to the All India Gem and Jewellery Domestic Council's half-yearly review of 2026, gold jewellery demand by volume has fallen even as silver has also become dramatically more expensive — both metals hit record highs in the same window, with gold peaking near ₹1,70,480 per 10 grams in January and silver crossing ₹4 lakh per kilogram the same month, before both corrected through the first half of the year. The World Gold Council's India Q2 2026 report recorded a 15 percent year-on-year drop in domestic gold jewellery demand, to 75 tonnes, with buyers postponing purchases or shifting toward lighter, lower-carat pieces rather than abandoning gold altogether.

So the more accurate description of what's happening is a two-track shift: consumers are buying gold differently — lighter, lower-karat, EMI-financed, exchange-driven — while also treating silver as a genuinely separate purchase, sometimes for investment, sometimes for everyday adornment, sometimes as a lower-cost entry point for buyers who might have bought modest gold pieces a few years ago. Jewellers like P N Gadgil have launched dedicated lightweight sub-brands explicitly to hold onto gold customers whose budgets haven't kept pace with prices, while also reporting rising investment interest in both metals because they are outperforming most other asset classes. Silver isn't simply mopping up gold's lost demand; it's attracting its own momentum, partly on the back of the same global forces — a weaker dollar, rate-cut expectations, and safe-haven buying — that have pushed gold to records.

That distinction matters for BIS's decision-making. A market where silver is genuinely expanding, drawing in new categories of buyers and new price-conscious segments, needs testing infrastructure that gold hallmarking's existing capacity was never built to absorb.

What's actually in force, and what's still under discussion

There is a good deal of confusion in circulation about where India's silver hallmarking regime currently stands, so it's worth being precise.

Hallmarking of silver jewellery and articles has existed on a voluntary basis in India since October 2005. For nearly two decades, a jeweller could choose to get silver tested and marked, but nothing compelled them to. That changed in one specific respect in September 2025, when the Ministry of Consumer Affairs, Food and Public Distribution notified a revised standard: any silver hallmarked from September 1, 2025 onward must carry a HUID code, bringing silver in line with the digital traceability system gold has used since 2021. The revision also expanded the recognised purity grades from five to seven — 800, 835, 925, 958, 970, 990 and 999 fineness — with 958 and 999 added for the first time, and it defined the hallmark itself as three elements: the BIS Standard Mark bearing the word "SILVER," the purity grade, and the HUID.

What has not happened is a mandate. Silver hallmarking remains optional for jewellers as of August 2026. Officials quoted through the first half of the year have been consistent on this point: BIS is evaluating a phased move toward compulsory hallmarking, examining infrastructure readiness, assaying capacity and stakeholder consultation, but no timeline has been set and no notification has been issued. This is a meaningfully different position from gold, where hallmarking became mandatory in June 2021 and has since been extended in phases — a sixth phase in March 2026 took the number of mandatory districts to 380, and the 9-karat grade joined the compulsory list in mid-2025. Silver is, by BIS's own account, several steps behind that trajectory, and deliberately so.

The reason for the caution is structural. Silver's retail footprint in India is far more fragmented than gold's — it spans fine jewellery, but also utensils, idols, coins, anklets, and a vast unorganised artisanal segment spread across small towns, in a way gold's more consolidated, higher-value retail trade does not replicate. Officials have described silver's "structural complexity" as the specific reason for moving carefully rather than replicating the gold rollout wholesale. Rushing a mandate onto that base risks disrupting livelihoods and pushing small artisans out of the formal system altogether — precisely the outcome hallmarking is meant to prevent.

Building capacity ahead of the rule, not after it

This is where the current infrastructure push fits in. BIS currently recognises roughly 230 Assaying and Hallmarking Centres equipped to test silver, spread across 87 districts. In the financial year 2024-25, a little over 32 lakh silver articles were hallmarked; by 2025-26, that had risen to around 59 lakh — an increase of more than 80 percent in a single year, achieved entirely under the voluntary system.

That trajectory is the real signal behind the "scaling up" story. If voluntary uptake alone can nearly double hallmarking volumes in a year, a formal mandate — even a phased one modelled on gold's district-by-district rollout — would multiply demand for testing capacity well beyond what 230 centres, concentrated in fewer than a hundred districts, could absorb without long queues, inflated testing charges, or corners being cut. Industry commentary around the preparations has been blunt about the sequencing: expanding the AHC network and strengthening throughput are described as prerequisites that need to be substantially in place before compulsory hallmarking can be introduced at scale, not something to be fixed after the fact. That is a lesson BIS appears to have absorbed from the gold rollout, which saw genuine bottlenecks at assaying centres in its early mandatory phases.

There is also a technical dimension that gets lost in casual comparisons between gold and silver hallmarking. Silver is a softer, more reactive metal, more prone to tarnishing and alloying inconsistencies, and it is tested and marked across a wider spread of purity grades than gold's familiar 22K/18K/14K ladder. A testing infrastructure built primarily around gold's assay chemistry and throughput doesn't automatically translate into silver capacity — centres need appropriate equipment, calibration and trained assayers specific to silver's properties. Building that out is a distinct and non-trivial exercise, not a simple relabeling of existing gold infrastructure.

What a silver hallmark actually tells a buyer

For consumers navigating this for the first time, the mechanics are straightforward, if underexplained by most retailers.

A BIS hallmark on silver is not a decorative stamp; it's a certification that the piece has been tested at a BIS-recognised Assaying and Hallmarking Centre and conforms to a declared purity grade. Under the current standard, that mark carries three components: the BIS logo alongside the word "SILVER," a purity grade such as 925 (denoting 92.5 percent fine silver, the sterling standard) or 999 (near-pure silver), and — for anything hallmarked after September 2025 — a six-character HUID code unique to that specific piece.

That HUID is the part that actually protects a buyer. Entering it into the BIS Care mobile app or the BIS website pulls up the article type, purity grade, the date it was hallmarked, which assaying centre tested it, and the registration details of the jeweller who sold it. If a code doesn't return a match in the database, the hallmark is counterfeit, regardless of how convincing the physical stamp looks. This closes a loophole that existed under the old system, where separate assaying-centre and jeweller marks could, in principle, be forged or mismatched without an easy way for a buyer to cross-check them digitally.

The practical advice for buyers hasn't changed much even with digital verification available: ask for a proper invoice specifying purity and weight, check that the hallmark includes a HUID if the jeweller claims the piece is hallmarked, and verify that HUID independently rather than taking a retailer's word for it. Hallmarking reduces the risk of under-purity or mis-sold silver, but it doesn't eliminate the value of basic diligence, particularly while the system is still voluntary and coverage remains uneven across the country.

What this means for jewellers and manufacturers

For organised jewellery retailers, the direction of travel is fairly clear, and most large chains have already begun hallmarking silver voluntarily in anticipation of tighter rules. Getting ahead of a mandate means fewer compliance shocks later, and — perhaps more importantly in a market where trust has become a genuine differentiator — a hallmark is increasingly something bigger retailers use to distinguish themselves from smaller, unorganised competitors on price alone.

For smaller jewellers and artisanal manufacturers, particularly in silver's traditionally unorganised segments — utensils, idols, regional jewellery styles — the calculus is less comfortable. Testing and hallmarking involve cost and time, and centres remain concentrated in a minority of India's districts. This is precisely why BIS has signalled a phased, consultative approach rather than a blanket mandate: a premature nationwide requirement risks pushing cost-sensitive segments of the trade toward informal, unhallmarked channels rather than formalising them, undermining the policy's own purpose. The gradual approach — voluntary hallmarking first, HUID standardisation second, capacity-building third, mandate consideration last — is designed explicitly to avoid that outcome.

If and when a mandate does arrive, it is likely to mirror gold's district-by-district phasing rather than a single national cutover, giving both testing infrastructure and smaller manufacturers time to adjust. Manufacturers who move early to document purity and build hallmarking into their supply chain stand to benefit from the credibility that comes with certified sourcing, particularly as bigger retailers increasingly demand hallmarked stock from suppliers to protect their own reputational exposure.

The bigger picture

None of this infrastructure-building would matter much if silver demand stayed at its historical, largely investment-driven scale. It matters now because the demand base is genuinely widening — pulled in by record prices that have made silver newly visible as an asset, by gold's affordability squeeze pushing some price-conscious buyers toward lighter and lower-value purchases across both metals, and by a general environment in which precious metals have outperformed most conventional savings instruments over the past two years.

India remains overwhelmingly import-dependent for silver, with annual consumption estimated in the range of 5,000-7,000 tonnes against a fraction of that produced domestically, split across jewellery, silverware and substantial industrial use in solar panels and electronics. A market of that size, growing more visible to retail buyers just as prices hit historic highs, is exactly the kind of environment where quality assurance infrastructure has historically lagged behind consumer exposure — as India's own experience with gold hallmarking, introduced on a voluntary basis in 2000 and only made compulsory two decades later, illustrates.

BIS appears to be trying not to repeat that lag with silver. Whether the eventual outcome is a full mandate, a hybrid system with mandatory hallmarking in the largest markets and voluntary elsewhere, or an indefinitely extended voluntary regime backed by heavier promotion, will depend on how quickly the assaying network can grow and how the industry absorbs the compliance burden. What's already clear is that the regulatory groundwork — the HUID system, the expanded purity grades, the growing AHC network — is being laid now, ahead of the rule rather than in response to it. For a market moving as fast as India's silver trade currently is, that sequencing may turn out to matter more than the headline price numbers themselves.

Prices and hallmarking data cited are as reported through early August 2026. Readers verifying a specific silver hallmark should use the BIS Care app or bis.gov.in rather than relying on physical markings alone.