The Developing Indian hallmarking – A roadmap for future growth report released by the World Gold Council (WGC) involved an in-depth assessment of India’s current hallmarking system as well as a summary of international best practice methods.
It also highlighted a number of strategies to enhance the system – such as increased governance and consumer awareness – which, if implemented, were expected to help build consumer confidence in the purity and quality of gold in India.
According to the study, such improvements had the potential to increase gold exports from an existing US$8 billion (AU$10.9 b) to US$40 billion (AU$54.7 b) by 2020. Exports from the country currently represent 8 per cent of the global gold market, while imports account for 20–25 per cent of global gold demand.
The Bureau of Indian Standards (BIS) introduced a hallmarking standard in 2000, and it was noted that despite the progress made in the hallmarking system since, only 30 per cent of Indian gold jewellery was currently hallmarked. Gold also exhibited a large degree of purity inconsistency and an average under-caratage of 10–15 per cent.
Commenting on the importance of hallmarking, WGC managing director of India Somasundaram PR said, “Hallmarking is to jewellery what ‘know your customer’ norms are for financial services; it is essential to the success of the jewellery industry in a world where consumers seek transparency, quality and consistency, and is critical to building consumer trust and confidence.”
The report also stated that a lack of BIS-recognised hallmarking centres across the country could impact on the successful implementation of the Indian Government’s gold monetisation scheme.
The scheme, which was announced earlier this year as part of the country’s 2015–16 budget, encourages the circulation of gold owned by individuals and other institutions in order to help reduce the country’s reliance on imports while also assisting the jewellery industry by making gold available as a raw material on loan from banks.
Recommendations
In addition to recommending that India’s current hallmarking model – which is built around independent hallmarking and assay centres – be retained, the report identified six actions to improve the efficiency and effectiveness of the system.
These included:
- Strengthening governance around hallmarking processes;
- Driving customer awareness of hallmarking;
- Incentivising and facilitating targeted expansion of hallmarking centres;
- Using BIS data to develop a ratings system for jewellers;
- Piloting a unique identification scheme or other technology solutions to allow consumers to trace items of hallmarked jewellery;
- Pursuing membership of an international hallmarking convention to encourage strong internal standards and quality control while also driving acceptance of Indian gold in international markets.
In the longer term, the report recommended hallmarking be made mandatory, adding that the industry would benefit from transitioning to a manufacture-driven system that would drive consolidation within the “unorganised” jewellery manufacturing industry.
The WGC is a market development organisation and international association of 18 gold mining companies. Based in the UK, the WGC has operations in New York, India, China, Japan and Singapore.
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