Buying hallmarked jewellery in India does not guarantee full purity, the World Gold Council said in a report released here on Thursday. It said better hallmarking can lead to five-fold jump in jewellery exports in the next five years.

“Even though, on an average, 30 per cent of jewellery is now hallmarked, there are concerns about the quality and credibility of some hallmarking centres,” the report titled ‘Developing Indian hallmarking: A roadmap for future growth’ said, adding that this implies the percentage of jewellery hallmarked accurately is expected to be even lower than 30 per cent. Hallmarking is considered a quality certificate after testing, and is designed by the Bureau of Indian Standards (BIS) under the Consumer Affairs Ministry.

At present, there are 399 BIS-recognised assaying and hallmarking centres in India. Tamil Nadu has the highest, 57 centres, followed by Kerala with 39. Overall, the Southern zone has 153 centres, while the North has 111. Out of 36 States and Union Territories, 12 have no testing centre, which means over 60 per cent of hallmarking centres are in India’s 20 largest cities, and even within cities, these are often clustered in certain areas, which creates uneconomic competition, the report added.

“There is also a suspicion that some jewellers encourage friends and family to open centres near them to facilitate hallmarking,” the report added. Such a trend leads to not following the testing process completely and the consumer buying a hallmarked product without full purity.

“Hallmarking is not mandatory and consumer awareness is limited, so jewellers are neither obliged nor incentivised to become certified. Moreover, hallmarked and non-hallmarked items are sold in same outlets,” WGC’s India Managing Director Somasundaram PR said.

He said operationally, many hallmarking centres suffer from lower profitability, poor equipment and slack processes. “The centres need to operate at a minimum of 50 per cent capacity just to break even at the BIS-stipulated price of ₹25 a piece. Many cannot achieve this target and so resort to price cutting and malpractice,” he added.

To strengthen the hallmarking system, BIS needs substantial extra resources to be able to enforce its policies effectively, drive hallmarking across India and increase confidence in Indian items nationally and overseas. The council recommended giving tax breaks and other incentives to such centres, developing a ratings system for jewellers, initiating a pilot BIS unique identity scheme and other technology solutions to support hallmarking.

It also suggested that India should pursue membership of the international hallmarking convention or develop an alternative to boost export/import of gold jewellery without testing for purity. “We need to sell jewellery as handicraft items, not metal,” Somasundaram said, adding that improvement in hallmarking can raise Indian jewellery exports to $40 billion from the current $8 billion.

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