When the temple priests at Katra completed their sorting the government mint in Delhi had begun to melt. Twenty tonnes of metal which lakhs of pilgrims had climbed with anklets, coins, miniature umbrellas and tiny figurines, was about to expose an ugly secret. What was believed to be worth a silver of anything between ₹500 crore to ₹550 crore, on assay, was turned out to be only ₹30 crore worth of the real silver. The remainder, 94 - 95 per cent, consisted of a mixture of cadmium and iron, which was then painted to make it resemble the white metal.

This one discovery, announced at the end of April, has done more in three weeks to dismay the Indian silver buyers than any Government circular has done in twenty years. And it couldn't be worse timing for the market because never in recent times have Indians invested more in silver, never paid more for it, nor had more to lose when the metal in their lockers turns out to be anything but silver.

Silver on the Multi Commodity Exchange was being traded at ₹2,72,907 per kilogram on the morning of this column as it dipped around 1.4 per cent on the day following a sharp surge earlier this month. The international rate of silver was around $77 per ounce while a kilo in the retail bazaar was offered at ₹2.85 lakh (inclusive of GST). In comparison, the price of the same kilo was slightly more than ₹62,000 at the beginning of 2021. The metal price has more than quadrupled over the past five years, with the bulk of the price increase occurring over the past 18 months.

The figures behind the rally are far from understated. At present, India uses approximately 7,000 tonnes of silver, as compared to 700 tonnes of gold, making it the biggest consumer of silver in the world. The silver trade considers the figures of Metals Focus, the London research house, to be gospel, and what is new is that it is now providing nearly 80 per cent of global demand for silver bars and coins. A year ago, October's silver imports alone were $460.3 million. The Indian market is not being morselled by Indian buyers. They feed on it as a whole.

Why they're eating it is that the old comforts with gold have become too expensive for the majority of middle-class wallets. Today, with the gold price at 24-carat at ₹16,000 per gram, a tola of gold fetches two months of salary for many families. With silver at record prices, it seems attainable. A 1K Bar isn't a deal-breaker, but it is a big investment. Fixed deposit was once a 100 gram coin. And the assets management figures bear this out. The AUM of Silver Exchange-Traded Funds (ETFs) in India rose by 126 per cent, from ₹7,473 crore in June 2024 to ₹16,866 crore in May 2025, whereas for gold ETFS, the increase was 82 per cent. Silver ETFs saw net inflows exceed gold ETFs for three consecutive months in March, April and May 2025, a feat not seen in more than two years. By mid-2025, folios associated with silver products had increased to over 8.37 lakh, as compared to January, when they stood at just over 6 lakh.

It's that investment frenzy that makes the Vaishno Devi findings so corrosive. This shrine board is not a fly by night. If a 95 per cent failure rate can be established in a metal collected by the general public from stores along the most walked pilgrimage route of the nation, what is in the bank lockers of the homes in small towns across India? Here the giveaway is Cadmium. Its fumes are carcinogenic and harmful to lungs and kidneys on heating, costs ₹400 to ₹500 a kilogram as compared to silver's ₹2.75 lakh, and mimics the colour and weight passably well. It's not the regular "adulteration". It's a public health issue in disguise of a scam.

This trend, as it has been the case for years, has been pointed out by stakeholders within the organised end of the trade and it is fitting here to air their point of view, even if it may not be comfortable for the larger family-run businesses. The case is that the Indian jewellery industry has established its credibility on hand-of-craft and dynastic trust, both of which are unscalable when prices are tripling in a span of five years and counterfeiters are getting this nifty. It's not about more marketing campaigns on the heritage that the sector now needs, it's about verifiable, traceable, ethically sourced metal, all the way from the refiner to the retailer. The proponents of this perspective are mostly from the less corrupt side of the trade, the design-focused, sustainability-conscious segment, which has witnessed the clean-up of the jewellery markets of the West by the EU's REACH norms and the US Federal Trade Commission's labelling regulations, and who would like India to avoid the dirty decades in between. If one Karva Chauth coin is sold for ₹3,000 and has got 20 per cent adulteration or base metal, there is not only loss to the consumer, there is loss to the business as well. It's to any honest working shop that has done a fair price on their piece of work, and now has it undercut by someone who hasn't.

The government has caught on, albeit too late. In September 2025, BIS released an updated version of the IS 2112:2025 standard, which introduces seven different hallmarks for silver purity, ranging from 800 to 999, and introduces the six-digit Hallmark Unique Identification (HUID) code on all voluntarily hallmarked silver items. As of December, 17.35 lakh silver articles had been stamped under the new system. In April 2026, Union Minister of Affairs Pralhad Joshi had pointed to the presence of more than 20 lakh hallmarked articles, and hinted that the next phase of making handing of articles mandatory was a question of when rather than if. The Director General of BIS had informed the media during a briefing in January at the bureau's foundation-day that the rules were being drawn up. The operational gaps have been pointed out by a policy paper doing the rounds in North Block, Koan Advisory. There are 1,622 assaying centres for gold and 230 centres for silver over 87 districts in India that are recognised by BIS. Tomorrow move to mandatory hallmarking and small workshops of Rajkot, Salem, Cuttack and Moradabad will be girdled by compliance burden. The consultancy is advising a three to five-year glide path.

This is the question that is setting the silver tape globally. The silver forecast for 2026 was made by JP Morgan's commodities desk in February, when the forecast was set to an average price of $81 an ounce, more than double the 2025 forecast, and expressly cited Indian and Chinese retail demand as the driver of silver's price from $80 to a high of over $120 this year, before it pulled back. Deliverable bars are in short supply in London's anteroom market for months and the rates for leasing have jumped, even with JPMorgan itself experiencing problems in delivering bars to India in time for orders. The structural deficit, which has occurred every year since 2021 when the world's mine supply fell short of demand, is not a talking point in trading rooms anymore. It is the trade.

So back to the cadmium. A market that is this hot, so global and so filled with rural household savings and urban ETF folios, can't be based on the premise that the guy behind the counter is honest because his grandfather was. The silver squeeze of October 2025 is the same one as the Vaishno Devi assay in April 2026. One is the amount of world demand for the metal. The other is how some sellers will put on a show when no one's watching.

The to-do list is about mandatory hallmarking, adequate funding for assaying capacity, criminal penalties for jewellers who sell cadmium tainted jewelry, mandatory disclosure of refiner provenance on every bar over 100 grams and an industry that ceases to see these changes as a threat and begins seeing these changes as a moat against the next imported scandal. All of it is expensive and all of it is slow. But, at ₹ 2.85 lakh per kilo, eight lakh ETF folios and twenty thousand pilgrims a day climbing the Trikuta hills, the market can no longer turn a blind eye to the cost of doing nothing.