India takes step towards mandatory hallmarking

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Government approves amendment to law concerning gold jewellery.

Hallmarking of gold jewellery could be set to become mandatory by law in India, which is the world’s biggest consumer of gold.

The Indian government has approved an amendment to a law which could lead to compulsory hallmarking of gold jewellery, a consumer protection measure that the country has never had to adhere to before.

The amendment has to be ratified by parliament before it becomes law, a process that could take up to eight months.

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One of the major challenges that the government will face in introducing mandatory hallmarking to India’s gold jewellery industry is the sheer scale of the country. The government had sought to introduce mandatory hallmarking three years ago but plans were deferred after it became clear that there were not enough assay offices across the country to make this possible.

At present the country works to optional hallmarking, with hallmarking usually only taking place in major cities. However, India’s goldsmithing business is still often a cottage industry, with much jewellery being produced in small regional workshops scattered all over the country – making the necessity of a wide spread of assay offices necessary to supporting any law.

The number of assay offices in India is reported to be about the same as it was three years ago, with 168 centres approved by the Bureau of Indian Standards (BIS) compared to some 100,000 gold jewellery manufacturing centres in the country that employ 2 million people.

According to BIS annual consumption of gold in India has grown to 500 tonnes, with 80% of this used for jewellery manufacture, most of which is at least 22ct.

The BIS is promoting mandatory hallmarking in India as a necessary consumer protection measure.

A BIS statement on gold hallmarking said: “Indian consumer is very often a victim of irregular metal quality. A buyer, for instance, will be told that he has bought gold of 22 carats. When he goes to sell or exchange it he discovers that the gold is actually only of 18 carats or many customers have lost money in this way.”

However, it is not blind to the impact that legally certified hallmarking could have on exports. It continued: “The RBI Standing Committee on Gold and Precious Metals opined that introduction of a hallmarking system would not only protect the public from fraud, but also assist exports of jewellery.”

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