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India makes gold hallmarking mandatory to prop up market

Dubai - Move to enhance credibility of gold jewellery and customer satisfaction through third-party assurance

India, the world’s second-largest gold consumer, implemented mandatory hallmarking on the yellow metal’s jewellery and related items from Wednesday in a long-delayed move to reposition the nation as a leading global gold market centre.

As per the new guidelines, jewellers across India will now be allowed to sell gold items of only 14, 18 and 22 carats. The hallmarking will be implemented in a phased manner, said Piyush Goyal, the Minister of Consumer Affairs, Food and Public Distribution.

“Continuing our government’s endeavour for better protection and satisfaction of customers, mandatory hallmarking in 256 districts will be implemented from June 16. No penalty will be imposed till August 2021. This will help develop India as a leading global gold market centre,” he tweeted.

The hallmarking is required to enhance the credibility of gold jewellery and customer satisfaction through third-party assurance for the marked purity/fineness of gold for consumer protection. This step is also expected to help develop India as a leading gold market centre in the world, the ministry said in a statement. Jewellers with annual turnover of up to ₹4 million will be exempted from hallmarking, which is a purity certification of the metal.

While gold hallmarking is currently voluntary in India and not a requirement, the move by the government aims to ensure gold consumers are not cheated by sellers. As per the new rules, if jewellery or an artefact made of 14, 18, or 22-carat gold is sold without the Bureau of Indian Standards hallmark, the jeweller could be penalised five times the cost of the object or imprisoned for up to one year. According to the World Gold Council, India has around 400,000 jewellers, out of which only 35,879 have been BIS-certified.

Hallmarking centres have grown by 25 per cent in the last five years. With the existing capabilities at these centres, India has the capacity to hallmark around 140 million articles per year.

In November 2019, the government announced that hallmarking of gold jewellery and artefacts would be made mandatory across the country from January 15, 2021. But the deadline has been extended twice amid the coronavirus pandemic.

Watches, fountain pens and special types of jewellery — including Kundan, Polki and Jadau — will be exempted.

“Jewellers can continue to buy back old gold jewellery without hallmark from the consumer. In order to give adequate time to the manufacturers, wholesalers and retailers of gold jewellery, there would be no penalties till August end. Old jewellery can also be hallmarked as it is, if feasible by the jeweller or after melting and making new jewellery,” the ministry said.

— issacjohn@khaleejtimes.com