As mandatory gold hallmarking kicks in, manufacturers push for exemption

Hallmarking will be done at the first point of sale, maintains BIS chief

There was anxiety in Zaveri Bazaar here after the first phase of the mandatory hallmarking of gold jewellery kicked off on Wednesday in 256 districts as the new rule is also applicable to manufacturers and wholesalers of jewellery.

A mid-size ornament maker in Sewri — the jewellery manufacturing hub in central Mumbai — said that there is now a rush to get registered with the Bureau of Indian Standards. ''We manufacture jewellery on behalf of big stores which sell hallmarked jewellery under their brands. Now, we will have to get jewellery hallmarked on their behalf but the government’s press note doesn’t have details regarding the same,” he complained.

A similar situation prevailed in other big jewellery markets. H N Soni of Navnit Jewellers in Jamnagar said: “While we have been selling only hallmarked jewellery, we will have to ask our manufacturers to get jewellery hallmarked with our brand.”

But larger players seem little impacted. One of India’s largest jewellery retailers, Tanishq (owned by Titan Company) whose own quality certification is well recognised by customers, is now fully compliant with hallmarking. Ajoy Chawla, CEO of Titan’s jewellery business, said: “We are 100 per cent hallmark compliant including our opening stock of jewellery at the stores.” Chawla added: "We will continue to do our own internal purity testing and certification in any case before sending to hallmarking.”

While larger players remain unaffected, manufacturers and wholesalers who form  significant part of the industry have ground to cover.  During an online meeting on Wednesday with the Bureau of Indian Standards (BIS), several jewellers from smaller cities and towns raised issues regarding the applicability of hallmarking norms on manufacturers which make jewellery in the sellers’brand name and also on jewellery given on job work, even as job workers are exempted from mandatory hallmarking. 

Surendra Mehta, national secretary, Indian Bullion and Jewellers Association (IBJA), said: “Confusion in various markets of India was because of asking manufacturers and wholesalers to hallmark jewellery they sell (to jewellery retailers or directly to customers). In our opinion, hallmarking should be mandatory only at the last point of sale — jewellers.”

Later, Pramod Kumar Tiwari, director-general of the BIS, told reporters: “Hallmarking shall be done at first point of sale, which can be manufacturer, wholesaler, distributor or retailer. Also, old unhallmarked jewellery available with households can be sold to jewellers.”  

During the meeting with jewellers and hallmarking centres, a BIS official stressed that there would be no fee for fresh registrations. But a notification regarding the same is still awaited. Likewise, while the government has also permitted hallmarking of 20, 23 and 24 carat jewellery, notification for the same is expected in seven-10 days.

According to the World Gold Council (WGC) data, there are around 400,000 jewellers in the country and only 40,000 of them are registered with BIS. Since jewellers having a turnover below Rs 40 lakh are exempted from registration, over 45,000 jewellers still have to get registered. The rest — over 300,000 jewellers — won’t be able to sell hallmarked ornaments.

According to conservative estimates, up to 250 tonne of non-hallmarked jewellery inventory is with jewellers in the 256 districts where mandatory hallmarking has been implemented. According to the government’s press note issued on Tuesday, at present, only 30 per cent of total jewellery is hallmarked in the country.  The 256 districts cover 40 per cent of India’s geography and account for an estimated jewellery market share of 50-60 per cent.

Chirag Sheth, principle consultant, South Asia, Metal Focus, a London-headquartered precious metals research firm, said: “We conservatively estimate between 150 tonne and 250 tonne of jewellery with stores in these 256 districts may be non-hallmarked. This account for half the total market in the region.” Another industry expert expects non-hallmarked jewellery inventory at much higher levels.

Sheth stated the government move will allow a level playing field between small jewellers and large stores, with gold purity now applying equally for both after mandatory hallmarking.

Harshad Ajmera, past president, Indian Association of Hallmarking Centres, said: “In 2019-20, 42 million pieces of gold jewellery were hallmarked”.

Surendra Mehta of IBJA said that the move will help bring unaccounted jewellery business to books.