‘Next 5-10 years are going to be interesting for the gold industry’

If I look back, we never thought there will be a mandatory hallmarking or HUID (hallmark unique identification) or IIBX (India International Bullion Exchange) or SEBI will take over electronic trading and bring out document on EGR (electronic gold receipt). Obviously, it was not easy. We have thriving assaying centres with India good delivery standard. There are plans to form an SRO. The industry is now poised for better reforms. The new India is a lot more confident. India is taking its stand on many global issues and dictating terms. However, when it comes to gold we are lagging. We are not talking of setting global standards. We are always stuck with taxes. This is going to change. India’s lead position affects the gold industry, not just in India but globally. A duty cut of 1 per cent is not going to matter much. We are going to be talking about sustainable sourcing and recycling to become a trading centre. We are moving ahead in organised retail so there will be lot more innovation in terms of adopting best practises. Digital transaction will become big because there is a push to reduce use of cash. However, this industry is used to cash transactions. So, there will be a definite convergence of national priorities. The next five to 10 years are going to be very interesting.

We did a study across the globe and looked at various models. We cannot simply adopt a model in this industry as it has peculiar points. For instance, the model of AMFI (Association of Mutual Funds in India) was considered, but mutual funds are regulated by SEBI. We also considered the model of automobile association and Nasscom (National Association of Software and Service Companies). However, these industries are more organised. We have to take the best practices of these industries. Gone are those days when we can have a separate quality for export and domestic markets. It is not like the government can bring the rule in every aspect of the industry. There is no need. The industry can suggest best practice. I do not think all these will fall in place on Day One.

Initially, the industry had a lot of issues, but it is fully accepted now, but there are always sceptics who say the number can be replicated. A small portion of the trade will continue to dilute whatever reforms are introduced with certain practices which are not very good. In fact, in one of the conferences there was an interesting discussion on small single outlet owners versus large, branded players. Single outlet owners were saying that hallmark has levelled the field and made them more competitive. Unlike large, branded players, smaller players can customise buyers’ requirements in terms of design and take fresh orders as per customer need. Hallmarking is no longer an issue.

It is very difficult to predict because there are elections slated in India and the US. What happens in US election will have lot more impact on global prices. There are wars going on and it has been discounted completely. If it takes an ugly turn it could also have an impact. We are in a peculiar situation that interest rates, stock markets and gold prices are all at a high. We have always heard that gold will do well when stock markets are bearish or when interest rates are low. I cannot speak about 2024 prices, but given the global situation, gold prices are not going to come down drastically for the next few years. People are going to buy more gold as they get prosperous. Central banks are buying at these prices though their decisions do not depend on prices. As per our survey, central banks have shown positive inclination to buy gold in the next 12 for 24 months.

The industry should focus more on design and work on the manufacturing aspect. It should not be ‘one design fits all’ approach. Can we have a flexible design with many moveable pieces. It requires a lot of thought. With 100 different pieces, can the industry make five best designs. It cannot be from people within the gold industry. We will have to bring design experts from other industries. We need innovation centres where there are people from different industries to share their views.