Jewellers say infrastructure not yet ready, massive government effort required.
To bring more transparency and uniformity in the quality of gold used in jewellery items, the government has decided to make the hallmarking of gold jewellery mandatory. The decision assumes significance due to the opaque business practices in the Indian jewellery industry.
The Union cabinet today cleared a proposal to amend the Bureau of Indian Standards (BIS) Act, 1986, that aims to expand the ambit of mandatory hallmarking to include more products, gold being one.
Jewellers say they welcome the move but have some apprehension over effective implementation, especially in rural and small towns, where price and quality of jewellery items remain a question.
“This is the best decision the Indian jewellery industry has got. The move will standardise over 500,000 jewellers across the country in quality and price,” said Ashok Minawala, ex-chairman of the Gems & Jewellery Trade Federation.
On successful implementation, every jewellery item would have an identity stamp on it for the purity of gold used for making it. Affixed by the local BIS arm, the stamp would be sufficient for jewellers to buy scrap gold ornaments at the market price. Both buyers and sellers would be confident of the metal they deal in.
Quality has always been an issue and consumers often prefer to continue holding physical stocks than to redeem for profits. At present, retailers differ from one another in the purity of gold used. The move would bring more transparency and help generate additional business, beside addressing existing problems in the jewellery trade, said Minawala.
A jewellery hallmarking scheme was started in 2001, with BIS named the sole agency. But the practice was not mandatory. “Infrastructure and logistics are the two mega challenges the government is going to face while implementing it. The government needs to set up local arms of BIS (hallmarking centres) for the mandatory stamping to avoid transport of jewellery items,” said Sandeep Kulhalli, vice-president of India’s largest branded jewellery producer and retailer, Tanishq.
At present, 77 items, including mineral water, milk products and cement, are certified through mandatory hallmarking by BIS.
Mehul Choksi, managing director of Gitanjali Gems, said, “It is a very timely step and will boost consumer confidence in our product, more important now at a time when prices of the metal have risen to record levels. The decision will also encourage industry to adopt modern technology and move towards new methods of manufacturing, extremely necessary in today’s scenario.”
Adding: “Gitanjali has been offering only hallmarked gold and certified diamonds for many years and it is one factor that had helped us win the trust of consumers. We hope the government will take steps to ensure an appropriate infrastructure, to make it easy for the industry to comply with the new regulation.”
For machine-made jewellery items, the hallmarking can be inbuilt as in the case of other consumer goods. But, handmade ornaments would require to be transported to the hallmarking centre. Again, the purity of gold, especially in ‘jadau’ jewellery differs. According to Kulhalli, awareness in rural towns needs to be intensified so that consumers get ornaments at the right price.
“Gold and jewellery the only sector which offers buyback. Ultimately, consumers are going to benefit from the mandatory hallmarking. Hence, they should ask for the right quality ornaments,” he emphasised.
