Mandatory hallmarking rule will disrupt the jewellery business affecting livelihood of millions, says jewellery association

Ease of Doing Business for MSMEs: The Central government had last year issued an Order making it mandatory for all gold articles that are sold to be hallmarked by June 2021. But the industry is of the opinion that the implementation of the Order without the right ecosystem will jeopardise the business of jewellers putting their livelihood at stake, especially those in rural markets.

One of the biggest concerns raised by the industry is the lack of Assaying & Hallmarking (A&H) centres that evaluate the purity of the gold jewellery submitted by the licensed jeweller.

“What is the hurry to make hallmarking mandatory? 33% of the districts don’t even have Assaying & Hallmarking (A&H) centres to provide the third-party assurance. Imagine a jeweller in a small village having to travel 300 kms with gold valuing lakhs of rupees to get it certified risking theft and even his/her life,” said Mumbai-based jeweller Ashok Minawala that runs showrooms under the brand Danabhai Jewellers.

Danabhai’s questions are representative of the entire industry. In fact, the gems and jewellery industry body All India Gem & Jewellery Domestic Council (GJC) has written to the Department of Consumer Affairs under the Union Ministry of Consumer Affairs, Food & Public Distribution requesting to postpone the deadline for implementation of mandatory hallmarking of gold jewellery by a year (currently it is June 2021).

“Out of the 733 districts in the country, only 245 districts have A&H Centres as per BIS data whereas jewellers are in each and every district of the country,” said Ashish Pethe, Chairman, GJC. He added that it will be very difficult to implement the law unless there is at least one A&H Centre in each district in the country.

“It is essential to have properly accredited, fully functional A&H Centres in all districts across the country, with proper infrastructure and trained personnel prior to the requirement of mandatory hallmarking,” he said.

According to the Government order dated January 15, 2020 issued by the Bureau of Indian Standard (BIS) all gold articles are required to be hallmarked and sold only by registered jewellers.

GJC said that the percentage of districts in several key Indian States without hallmarking centres is very high. There is no presence of Hallmarking Centres in 488 districts. 66.58% of the country has no Hallmarking Centres. 245 districts have Hallmarking centres but they are concentrated only in and around the urban area or clusters where there is heavy concentration of jewellers.

“There are many states / Union Territories where there are no A&H Centres, i.e. Arunachal Pradesh, Ladakh, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Andaman & Nicobar Islands, Dadra & Nagar Haveli, Daman & Diu and Lakshadweep,” said the association’s statement.

GJC is of the view that scarcity of A&H Centres will lead to jewellers closing their business and unemployment will be on high rise. It is an undisputed fact that any A&H Centre would require at least three to four months to be commissioned. Considering the timelines for commissioning an A&H centre and the number of such centres that would be required, it must be considered whether the June 1, 2021 timeline for mandatory hallmarking is achievable.