Introduction Silver diamine fluoride (SDF) with potassium iodide (KI) has emerged as a promising, aesthetic, non-invasive management by limiting the staining caused by SDF. However, no studies are comparing the caries-arresting potential of SDF gel with KI. The study aims to observe and evaluate the caries-arresting potential of SDF gel with KI compared to sodium fluoride (NaF) varnish. Materials and methods The present observational study was conducted with a split-mouth design. A total of 33 participants, in the age group of two to six years, with occlusal caries of the International Caries Detection and Assessment System (ICDAS) I and II involving both right and left upper or lower primary molar teeth, were included. SDF gel with KI and fluoride varnish (FV) was applied to the contralateral teeth on the same arch. Participants were recalled at 3, 6, 9, and 12-month intervals to monitor the progression or arrest of carious lesions. Result At the end of 12 months, 66.7% and 70.5% of the teeth showed arrest of caries with SDF gel with KI and FV, respectively. Intra-group analysis using the Friedman test shows significant differences in both groups across the timeline (p=0.001). Intergroup analysis using the Whitney U test reveals no significant difference in caries-arresting potential between the groups at various timelines (p=0.231). Conclusion There was no significant difference in arresting enamel caries of primary teeth between the use of 5% NaF and 38% SDF with KI. However, there was a significant difference within the group between the 3rd and 12th-month follow-up. Hence, the biannual application is recommended in both FV and SDF with KI.