India ranks number one in the world when it comes to gold consumption, and for more than a decade, the Government of India and established gold associations of India have been working towards bringing in better and more streamlined regulations for gold trade at the retail level. Their efforts finally paid off and the Government of India recently declared that from 15 January 2021 onwards, only hallmarked jewellery will be sold in India.
To be precise, all 14, 18, and 22-carat gold items will have to be compulsorily hallmarked before sale but small quantities of jewelry such as 2 g or less are not required to be hallmarked.
This hallmark move by the government has been hailed by the prominent jewelry associations of India such as the India Bullion and Jewelers Association as the new regulation is expected to boost consumer trust in the gold exchange, eventually benefitting the consumers, traders and the Indian economy as a whole. Moreover, the government has given a period of 1 year for traders and other important stakeholders in the gold industry to make amendments in their inventory, manufacturing processes, and exchange processes so as to abide according to the new rules.
Non-hallmarked products can now be melted or modify suitably to meet the hallmarking standards. Industry experts have claimed that the Indian jewelry system is fully equipped to handle this new change without causing any distress to consumers.
National President of IBJA, Prithviraj Kothari said, “This rule is based on an international outlook. Internationally, 9, 14, 18 and 22-carat gold products are typically hallmarked. The government has given us ample time to take care of our current inventory that is not hallmarked, so traders and consumers both should not face many issues. We were pursuing this issue of hallmarking for many years and it has finally happened; we welcome this decision. Purity standardization should be seamless and well established, and price and purity clarity will be fully established because of this new rule.
With the issue of purity being fully resolved, people’s trust will increase. People can now sell jewelry from one shop to another easily. Regardless of whether one is a small or large-scale gold trader, a level-playing field will be established because of this new rule.
The final responsibility of ensuring the implementation of the new regulation is with the jewelers because when a consumer has issues with the purity of the gold product, he or she complains to the jeweler. When the rules for jewelers are stringent, they will ensure that they sell only pure quality gold and will not be able to fool customers. We have a good number of hallmarking centers across India (around 234 centers across various locations) and more will spring up in 1 year’s time to meet the demand. Jewelry of any carat can be exchanged easily and with a good level of transparency.
Moreover, the BIS standard will now be considered a ‘good delivery standard’, which is a great move. With the arrival of the good delivery standards notification, purity- and manufacturing-related details will be clearly mentioned on the gold bars along with BIS and other important accreditations. Impurity issues will be resolved completely because of this and the much-awaited Indian standards for gold will be established.
Indian refineries and bullion companies (spot exchange) will also be able to transact better. In the future, we need better government regulations to bridge the domestic and international gold prices, gold tax, and transaction rules to make the gold-exchange system better and more profitable.”