🙏Uncertainty looms as mandatory hallmarking for gold with unique ID comes into force – The Hindu BusinessLine

Clipped from: https://www.thehindubusinessline.com/markets/gold/uncertainty-looms-as-mandatory-hallmarking-for-gold-with-unique-id-comes-into-force/article66684267.ece

Jewellers gear up but fear the rollout could be difficult as only 1/3rd of 773 districts in the country have assaying and hallmarking centres

India will become the first country in the world to sell gold jewellery only with Hallmark Unique Identification (HUID) even as the industry has raised concern over its implementation on lack of adequate infrastructure.

A concept launched in July 2021, HUID has faced strong resistance from the jeweller’s community and nationwide protests. In a bid to cool down tempers, the government initially implemented it on jewellers with an annual turnover of  ₹40 lakh and implemented in 256 districts across 28 States and union territories.

On its part, the government provided ample incentives to investors for establishing hallmarking centres in smaller cities for implementing HUID across the country by April 1, 2023.

In a quandary over penalty

Kumar Jain, national spokesperson, India Bullion and Jewellers Association, said it is going to be quite difficult for rolling out HUID across India as there are assaying and hallmarking centres only in 288 districts of the 773 districts in the country.

Jewellers are definitely not ready and there is lot of uncertainty. All the jewellers sell four-digit hallmarked jewellery which also assures quality for consumers and now this HUID has come,” he added.

Jewellers are in quandary as sale of gold jewellery without HUID will attract a penalty of five times the price of the jewellery or one year imprisonment or both. Most of them fear that they would be harassed by government authorities and ease of doing business will go for a toss. Considering the system being implemented for the first time in the world, it is not expected to settle without friction, said a jeweller.

Earlier, the All India Gem and Jewellery Domestic Council had sought a three-month extension in implementation of mandatory HUID as it is sitting on 20-25 per cent of inventory to be hallmarked with HUID.

Uptick in consumer demand

Ramesh Kalyanaraman, Executive Director, Kalyan Jewellers, said the rollout of the HUID regulatory framework will play a critical role in accelerating formalisation in the jewellery industry.

There has been a significant uptick in consumer demand shifting from unorganised to organised players and the mandatory HUID will further aid organised players and create a level playing field for the entire sector, he said.

The mandatory hallmarking will not move a needle as they are already assured of quality with the four-digit Bureau of Indian Standards. It comes at a time when the jewellery demand has slowed down due to sharp fluctuations in gold prices.

Jain said the demand is weak though the marriage season extends till July and most consumers are recycling old gold when prices are ruling high.

Infrastructure slack

Vaibhav Saraf, Director, Aisshpra Gems & Jewels, a leading brand from eastern Uttar Pradesh said though mandatory hallmarking is a good move, the current infrastructure is still not up to the mark. There are not many hallmarking centres at all locations and the select few who are there are not sufficient to tackle the load of the entire industry, said Saraf.

“We hope to see more centres created so that even the smaller players can easily get their products hallmarked. This will ensure that the policy is successfully enforced discouraging black and grey marketing of gold,” he said.

Aditya Pethe, Director, WHP Jewellers said hallmarking has been in the works over the past 7-8 years and compulsory hallmarking will ensure no customers would be cheated with regards to the purity of gold.

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