Mandatory hallmarking of gold jewellery: Lack of awareness remains a hurdle

Mandatory hallmarking for gold jewellery is likely to be notified within a week or two, and from that day a one-year clock will start ticking for jewellers to adhere to the new norm. But for its successful implementation, according to government officials and industry experts, consumer awareness is necessary.
 
They said resources with the Bureau of India Standards (BIS), which is the implementation and supervisory authority for hallmarking, are limited, or in other words, mandatory hallmarking will succeed only when consumers insist on it. The government had announced mandatory hallmarking of gold jewellery at the end of November.
 
Estimates regarding the number of jewellers and ornaments being hallmarked at present are varied. But policymakers and market insiders said the number of jewellers could be fewer than the estimates. Some industry associations have stated there are 300,000-400,000 jewellers across India. However, this number could be as low as 100,000, experts said.
 
“In our conservative estimate, there could be around 120,000-150,000 jewellers in the country,” said Debajit Saha, senior analyst-precious metals demand, GFMS. Many other organisations working for transparency in the gold industry put it around 80,000-100,000.
 
They said many moneylenders and artisans count themselves among jewellers but they are not.
 
Only 26,019 are registered with the BIS to sell hallmarked jewellery; jewellery hallmarking has been there, though voluntary, for the past two decades. Hallmarking gives consumers an assurance regarding purity of the gold ornaments they bought, but awareness is lacking, said experts.
 
“In our study, we have observed that virtually no hallmarked gold is sold in smaller cities and rural areas. Consumers are often unaware of the hallmarking system. We have also found that some dubious jewellers are selling under-carat jewellery with hallmark claims, cheating consumers across the value chain. This is largely happening in the eastern and some parts of the northern and central India,” said Saha.
 
He further said: “In our field study across the country, we have found jewellers selling 916 purity jewellery (22-carat) to customers, but those items are often not more than 80 per cent pure.” In South India, consumer awareness regarding hallmarking is high and hence, the situation there is much better.
 
A senior official at the Ministry of Consumer Affairs said: “Our understanding is that 40 per cent of jewellery is hallmarked, though there is no official data on this. As many as 44.9 million jewellery pieces were hallmarked in 2018-19.” Industry players and analysts had in the past stated that the average piece of jewellery is of 10 gram. But the government official quoted believes that the actual weight of an average hallmarked piece may be lower.
 
At the 10-gram average size, the hallmark jewellery estimate comes to 80 per cent of gold ornaments being hallmarked, which to many experts and government official is an “unacceptable” figure. The government official quoted above said: “40-50 per cent appears nearer to reality”.
 
The World Gold Council had done a survey in the first half of 2019 and it stated distrust of jewellers and fake or heavily impure ornaments were among major concerns for consumers in India and across the world.Though jewellers have been given one year to clear the stock of their non-hallmarked jewellery, with the implementation of mandatory hallmarking, they will now have to be much more careful and forthcoming over the purity of their products, said experts.
 
There is also an issue of strengthening the BIS. For implementing mandatory hallmarking, the BIS needs more staffers to inspect and create an atmosphere where jewellers take it seriously. A source close to the development said that “the government has received a proposal for strengthening the BIS, especially for implementing mandatory hallmarking”.