With the Central government mandating hallmarking of gold jewellery from today to ensure purity and quality from a consumer's point of view, a new avenue of business, which is now running in losses with revenues of less than Rs 150 crore, is going to prosper- assaying and hallmarking centres.
The government has given one year's time to jewellers to register themselves with the Bureau of Indian Standards (BIS) and clear their old stock. While a section of the jewellery retailers in the unorganised sector opposes the move citing practical issues and lack of adequate hallmarking centres, the actual truth is exactly the opposite.
India already has about 900 hallmarking centres, covering 70-75 per cent of all the districts in the country. In 2017-18, 4.25 crore pieces of jewellery were hallmarked by these centres, which was only 40-45 per cent of the total jewellery sold in the country. In 2018-19, hallmarking would fetch similar figures, about 4.5 crore pieces. This means roughly each of these units hallmarked less than 4000 pieces in a month.
"While on average, we can hallmark 500 pieces a day, we are running on losses and working at less than 30 per cent capacity at roughly 100-150 pieces a day. Each of these units have invested Rs 80 lakh to Rs 1 crore on machinery and infrastructure employing 7-8 people, but our income is only Rs 35 per piece plus 18 per cent GST, with a minimum of Rs 200 per piece business," Abhishek Nikam, joint secretary of the Indian Association of Hallmarking Centres (IAHC) and owner of Nityanand Assaying and Hallmarking Centre at Mumbai's gold hub Zaveri Bazar told Business Today.
He notes that a city like Mumbai has about 50 hallmarking centres and in most areas, the hallmarking and assaying centres are located close to gold trading centres that are frequented by manufacturers and retailers every day.
It is estimated that so far only less than 30,000 jewellers have registered with the Bureau of Indian Standards (BIS) and a majority of the units in the unorganised sector are yet to register with the quality control organisation.
Hallmarking and assaying centres are third party quality assurance centres licensed and monitored by the BIS and jewellery traders are not allowed to start and run own centres. Hallmarking has been mandated for jewellery in three categories - 14 carat, 18 carat and 22 carat, the most preferred in India. Hallmark on gold jewellery now will have four marks - the triangle emblem or the BIS mark, purity in carat displayed like 22K916, 14K85 and 18K750, assay centre's name and jewellers' identification mark or logo.
Nikam notes that most consumers are not aware of these marks and often think the black laser printed fake logo on the jewellery as a quality certification. While diamonds are the most preferred jewellery in North India, South India prefers 22 carrot ornaments and states in the West such as Maharashtra are interested in a mix of these carats.