Less than 30% of jewellery pieces are hallmarked: World Gold Council

Indian households own nearly 22,000 tonnes of gold and around 600 tonnes of gold is used in jewellery production each year, WGC says

In a country where that has an insatiable appetite for gold and jewellery, a latest report by the World Gold Council (WGC) suggests that less than 30% of jewellery gets hallmarked.

The report also finds that an increased confidence in Indian gold, which a rigorous and consistent nationwide scheme would deliver, has the potential to increase the country’s gold exports from an existing $8 billion to $40 billion by 2020.

“Even though, on average, 30% of jewellery is now hallmarked, there are concerns about the quality and credibility of some hallmarking centres. This means the percentage of jewellery hallmarked accurately is expected to be even lower than 30%,” points out Somasundaram PR, managing director, India, World Gold Council (WGC).

While Somasundaram pegs the average hallmarking rate at Rs 25 per piece of jewellery, it is only the high value jewellery costing above Rs 100,000 that has the highest penetration of hallmarking at 80%, he says. Low value jewellery is the least hallmarked and has a penetration level of 10%.



This, according to the report, is despite over 300 hallmarking centres, over 13,000 jewellers that have been accredited and the BIS establishing a supervisory structure for both hallmarkers and retailers. A positive over the years, however, has been that under-caratage has reduced from between 20% and 40% to between 10% and 15%.

Geographically, Tamil Nadu tops the list of BIS recognised assaying and hallmarking centres with 57, followed by Kerala with 39. In terms of zones, distribution is uneven; the South has 153, the West has 65, the North has 111 and the Northeast has only one. Also, out of the 36 states (including Union Territories), 12 have no testing centres.

Cherished as both an adornment and an investment, Indian households own nearly 22,000 tonnes of gold and around 600 tonnes of gold is used in jewellery production each year. “Of the current national gold stock of around 22,000 tonnes, nearly 80% of the gold is not hallmarked,” Somasundaram says.

Key recommendations

The report recommends that India’s current hallmarking model, built around independent hallmarking and assay centres, should be retained.

In addition, the report recommends six key actions for improving the efficiency and effectiveness of the current system. These include strengthening governance around hallmarking processes; driving customer awareness of hallmarking; incentivise and facilitate targeted expansion of hallmarking centres; using BIS data to develop a ratings system for jewellers; pilot BIS’ unique ID scheme or other technology solutions to support hallmarking and pursuing membership of the International Hallmarking Convention or develop an Asian alternative.

For the long-term, however, the report recommends hallmarking should be made mandatory and recommends a transition to a manufacture-driven system which would drive consolidation within the unorganised jewellery manufacturing industry.

"The trust and confidence which comes with a credible nationwide hallmarking system will underpin the growth of gold jewellery exports, boosting the Indian industry’s credibility in the global jewellery sector. It is a fundamental requirement if the industry wants to have a bigger role in the ‘Make in India’ ambition and eventually position India as 'jeweller to the world’. In addition, the quality of gold would be a critical element for the success of the gold monetisation scheme”, the report says.