Gems & jewellery may lose sheen in NRI season

Gujarat traders may shut shop if govt does not amend Hallmarking Act.

For over 15,000 gems and jewellery traders in Gujarat who make a killing during the non-resident Indian (NRI) season between December and February each year, this time could turn out to be a damp squib.

Gujarat's traders are a part of over 70,000 gems and jewellery traders across the country, who may shut shop if the government does not amend the Bureau of Indian Standards (BIS) Hallmarking Act before it is made mandatory in the four metros from January 1, 2008.

The average import of jewellery into India is around 2 tonne per day of which Gujarat accounts for a 10 per cent share. At the current rate of Rs 10,300 per 10 gm of gold, this could result into tremendous losses for local traders. Moreover, the tussle regarding the BIS Hallmarking Act comes at a time when Gujarat received a high tourist inflow this year. Industry sources said the number of domestic and foreign tourist arrivals was close to 10 million with more expected to arrive in the month of January.

"We have made our case before the government requesting an amendment to the BIS Hallmarking Act. If we do not get a favourable response from the government, we will be left with no option but to close trade though it is a very important season for gems and jewellery trade in the state," said Haresh Soni, director of Gem and Jewellery Federation (GJF), the national body of jewellery trade in the country.

He added that the move could divert NRI jewellery buyers to Dubai or other countries.

The government's move to introduce licensing of jewellery as part of the BIS Hallmarking Act has led traders to fear that the law could be similar to the Gold Control Act, which they claim hampered gold trade for 20 years.

"Under the Licence Act, any shortcomings in the quality of jewellery would lead to revocation of the retailer's licence for six months or even a cancellation despite the fault at the manufacturing level," said Zaveribhai Mandalia, director, GJF.

Another important aspect being highlighted by the jewellery traders is that migration to mandatory hallmarking by January 1, 2008, is impractical considering the number of Hallmarking centres are few when compared to the demand. So far, the government has given out only 5000 licences as against a retail trader community of over 70,000.

"There are only 25 hallmarking centres in the four metros against an estimated requirement of 500 centres. Across the country, 3000 more hallmarking centres are required and at least 250 for Gujarat before we can make the process of migrating to BIS Hallmarking convenient for traders who come from rural and semi-rural areas," added Mandalia.