Gold & Silver

Despite facing teething issues, gold hallmarking set to benefit all stakeholders

Subramani Ra Mancombu Chennai | Updated on August 01, 2021

Gold hallmarking is a purity certification

Assaying centres issue unique id for over 3.8 lakh jewellery pieces; ‘rumours’, ‘fears’ attract attention

The Centre’s initiative on mandatorily hallmarking gold jewellery, which accurately determines the proportionate of precious metal content in a product, is facing some teething problems but it is seen as a move benefitting all stakeholders.

However, “fears”, “rumours” and “fear-mongering” over the process have attracted attention more than the ground reality, according to industry participants.

The Union Government brought mandatory gold hallmarking from June 16 this year. The objective of the move is to protect consumers from any adulteration and usher in the much-required credibility in the bullion industry.

This has been rolled out in 256 districts in the country where assaying and hallmarking centres (AHCs) have been established. Jewellery traders have been given time till September 1 to obtain hallmarking for the old jewellery in their possession.


Union Commerce Minister Piyush Goyal has told the bullion industry that no penalty or coercive action will be taken during this period. The Centre has also come up with a few measures relaxing the hallmarking guidelines.

One, it has exempted jewellers who have an annual turnover of less than Rs 40 lakh. Two, gold jewellery weighing less than two grams have been exempted from this.

Three, the Centre has exempted jewellery for international exhibitions, jewellery for government approved business-to-business domestic exhibitions from the hallmarking. Four, it has also exempted watches, fountain pens and special types of jewellery such as Kundan, Polki and Jadau from the process.

“There are two processes to hallmarking. One, the jeweller will have to register with the Bureau of Indian Standards (BIS). Two, the jewellery sold by any outlet will have to have a unique identity (HUID) number. There is some delay in giving this HUID by AHCs,” said CA Surendra Mehta, National Secretary, Indian Bullion and Jewellers Association (IBJA).

Jewellers cannot send or sell material without the HUI and this has led to delay in completion of orders by them. “The delay in sales is nothing compared to the rumours and fears that have been expressed,” Mehta said, adding that the BIS move on gold hallmarking was to protect the consumers.

Will improve credibility’

“Hallmarking will benefit customers but jewellers see it as a tedious mechanism. These are teething problems but hallmarking will ensure uniformity in caratage that is good for the industry, customer. It will improve the industry’s credibility further,” said Vinod Kapoor, a jeweller from Chandigarh.

From June 16, jewellers in the 256 districts where AHCs have been set up, are allowed to sell only gold jewellery of 14, 18 and 22 carats. In addition, the AHCs have begun providing hallmarking for gold of 20, 23 and 24 carats.

“We at the World Gold Council (WGC) have supported hallmarking from day one. If there are problems in implementing it, the trade and the Government can sit across and sort it out,” said PR Somasundaram, Managing Director - India, WGC.

According to the WGC, India has about four lakh jewellers and 35,789 of them have got the BIS certification.

Practical issues’

“The HUID is a six digit number consisting of alphanumeric numbers. There are some practical difficulties in giving these numbers for jewellery such as ear rings or studs. What if the same number is given to two different jewellers? Any problem can land jewellers in jail or force them to pay penalty,” said Ba Ramesh, Joint Managing Director, Thangamayil Jewellery Ltd.

“Fears are being raised on the grounds of traceability, which hallmarking ensures. Some fear that their business will collapse in view of this but traceability is only to ensure that whoever makes a particular piece of jewellery delivers the caratage as claimed. Otherwise, the fears are unfounded,” said IBJA’s Mehta.

Sales by consumers

There are also suspicions raised over problems people could face in selling jewellery. Some fear that lack of hallmarking will affect the sales of the jewellery they hold.

“There will be no problem in selling gold by individuals to jewellers - organised and unorganised players. Organized players will melt jewellery sold to them, find out the caratage and pay for the gold content as usual,” said Kapoor.

A consumer wanting to sell gold will not be charged anything for testing the precious metal’s purity or the jewellery content, he said. “The whole issue is over technical upgradation and what we are witnessing are teething problems,” the Chandigarh-based jeweller said.

“The intention of the Government is good but the problem is in its implementation. There are problems with the software and hallmarking has been launched without adequate preparation,” said Ba Ramesh, whose firm is listed on the stock exchanges.

Though some point to problems that small jewellers could face since all details have to be registered before sale, others in the industry say that the small players have anyhow been exempt from the process.

Less than 20 per cent seek HUID

“This move is more to kill unauthorised hallmarking which cannot help consumers find if the product is fake or real. The HUID will now reveal everything,” said an industry participant, not wishing to be identified.

On the Centre’s part, the Commerce Minister has pointed out that with about 80,000 jewellers having BIS licence and less than 20 per cent of the 4-5 lakh jewellers are bringing their jewellery for HUID.

Jewellers in nearly 65 per cent of the geographical area of the country have not yet gone for HUID as they don’t have any AHCs in their region. Also, exemption to jewellers with less than Rs 40 lakh annual turnover and products below 2 gm will benefit a majority of artisans and rural jewellers, according to the Hallmarking Federation of India .

According to the Indian Association of Hallmarking Centres, a total of 73,784 jewellers have registered so far at the 933 AHCs across the country. The centres have received 47.3 lakh jewellery pieces till July 30 for HUI. Of these, 3.83 have received the HUI.

Over three lakh pieces get the HUI every day and this by, any standard, is good, industry participants point out. According to the Ministry of Consumer Affairs statement, each AHC can hallmark 1,500 articles a day.

“Actually, HUI has to be done in 48 hours but due to logistics and other issues, it takes up to 72 hours. This is not a big issue at all,” said another participant, speaking on the condition of anonymity.

Published on August 01, 2021

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