Gold hallmarking firms to invest ₹100 cr to meet rising demand

Gold hallmarking companies plan to invest ₹100 crore in setting up 100 new centres across the country as the Bureau of Indian Standards enforces hallmarking on all gold jewellery.

Though the compulsory hallmarking guideline on jewellery was introduced by BIS in 2000, its effective implementation has just begun with the Centre making a provision to levy penalty on jewellers breaching the rule.

Most of the organised jewellery retailers, who command a market share of about 30 per cent, have already fallen in line even as brands with regional play are gearing up to meet the BIS norm.

New hallmarking centres Interestingly, many family-run jewellers in villages and small towns with a limited clientele base would be impacted as the availability of hallmarking centres is limited in these regions.

James Jose, Vice-President, Indian Association of Hallmarking Centres, said the spread of hallmarking centres is skewed to cities and large towns as it is largely driven by the demand.

With about 100 new hallmarking centres coming up in various cities with an investment of ₹1 crore each, the country will have adequate capacity to hallmark the annual demand of 900 tonnes, he said.

The hallmarking by 375 BIS recognised centres increased by six per cent last fiscal to 370 lakh jewellery pieces weighing about 500 tonnes. A hallmarking centre requires a minimum income of ₹3 lakh a month to survive. Considering that hallmarking centres charge ₹25 a piece irrespective size and gold content, it requires 12,000 pieces a month to break even.

Smaller towns Rajkumar Jain, Proprietor, Kesar Hallmarking Centre, said in smaller towns such as Kanpur and Mysuru the capacity utilisation of hallmarking centres is just 30-40 per cent against about 100 per cent in towns and cities.

With most of the new hallmarking centres coming up only in large cities, jewellers in small towns may find it difficult to meet the mandatory hallmarking regime, he said.

The new BIS norms are more consumer-friendly and come with five hallmark logo. It specifies purity in just three categories of 14 kt, 18 kt and 22 kt which plays a key role in determining gold jewellery prices.

To ensure better traceability of jewellers in case of complaints, each jewellery piece will have a unique alpha-numeric identity, which corresponds to the BIS licence.