Expressing serious concern over the mandatory hallmarking of jewellery, the National Task Force says, the Bureau of Indian Standards (BIS) cannot change the tradition and fabric of the jewellery industry by putting the livelihood of lakhs of jewellers at stake and thus affect crores of dependents.
The National Task Force was formed out of 350 associations and federations representing east, west, central, north, and south zones of the entire gems and jewellery industry with an objective to ensure a smooth implementation of mandatory hallmarking across the country. BIS, under the ministry of consumer affairs, is the administrative authority of hallmarking.
According to Dinesh Jain, director of the All India Gem and Jewellery Domestic Council (GJC) representing MSME sector and core committee member of the National Task Force on Hallmarking, the existing stock of about 50 million jewellery pieces are required to be hallmarked from across the country.
"At the current capacity of Hallmarking centres, 1 lakh pieces per day, it will take around 500 days, equivalent to 18 months to hallmark the existing stock lying with jewellers and at peak capacity of hallmarking centre it would still require 250 days, equivalent to nine months to hallmark the existing stocks.
"The question remains, when will the new 12 crore pieces stock worth Rs4.50 lakh crore that is manufactured this year be hallmarked, considering the market size of 900 tonnes? This will eventually lead to collapse of the industry," he added.
Hallmarking enables consumers and jewellery buyers to make a right choice and save them from any unnecessary confusion while buying gold. According to World Gold Council, India has around 400,000 jewellers, out of this only 35,879 have been certified by the BIS.
The National Task Force says, "Only a handful of a few corporates and large retailers will survive, while the rest of the jewellers will have no choice and will be compelled to wind up their business."
After three meetings of the expert committee and four meetings of the advisory committee appointed by the Union government, no substantial resolutions have taken place barring a few issues and no clarifications are being issued.
"BIS as an independent authority is only issuing frequently asked questions (FAQs), which has so many defects and ambiguities. It seems that the BIS is hell bent upon enforcing things in their own way, not realising the gravity of the concerns of the industry," the National Task Force says.
According to the jewellers, while matters are still under discussion in the advisory committee, BIS has arbitrarily imposed a new marking system, which has no nexus between purity and the standard of gold being used.
They claim, "This new marking has no relevance to the core objective of the BIS or hallmarking, to ascertain the purity of the gold. The standard operating procedure (SOP) of this new marking system has disrupted the entire industry and has brought the business to a standstill. The hallmarking that used to be conducted within two to four hours is now being done within five to 10 days."
"The hallmarking centres are totally incapable to handle the pending stocks lying with jewellers for hallmarking. The pile up of pending stocks for hallmarking will take five years at this present operating speed, while the BIS continues to consider this as a teething problem," the National Task Force says.
The government had asked Niti Aayog to develop a detailed report on mandatory hallmarking after a full study. However, the National Task Force says, "BIS has practically ignored the major recommendations of the Niti Aayog report on hallmarking and have now reached a point of no return and must try considering each recommendation."
Hallmarking of jewellery and artefacts is required to enhance the credibility of gold jewellery and customer satisfaction through third party assurance for the marked purity and fineness of gold, consumer protection. This step will also help to develop India as a leading gold market centre in the world, the government says.
However, Fatehchand Ranka, president of Maharashtra Sarafa Swarnakar Mahamandal and core committee member of National Task Force on Hallmarking, points out that during the 40 days of the mandatory hallmarking regime, 72 hallmarking centres have been either cancelled or suspended across the country.
"Previously, out of 933 centres, almost 450 centres were suspended. This shows that one out of two assaying and hallmarking centres (AHC) was either cancelled or suspended for contravention of law. How can we rely on such a system and such hallmarking centres and become victims of their failure?" he asks.
Further, Mr Ranka objects to the new marking system under hallmarking unique identification number (HUID) introduced to monitor hallmarking centres. He says, "It is unwanted that jewellers have been dragged into the administrative process of HUID, which has no relevance to the purity, which is a serious concern for the industry to conduct their day-to-day affairs. How can we as jewellers accept such frivolous systems and processes adopted by the BIS and allow our customers to become victims of the same."
Yogesh Singhal, president All India Bullion & Jewellers Federation and core committee member of National Task Force on Hallmarking also raises the same concern. He says, "When an independent third party does the assessment or certification of a product, how can the first party be made responsible for the same? What kind of laws are these? The present BIS Act is making the jeweller responsible for a failure in purity of an item of jewellery after it is hallmarked by a hallmarking centre. While the industry has been continuously objecting to this with the BIS and till today, no action has been taken and the jeweller has been made a soft target."
For the past 20 years of voluntary hallmarking, BIS has been applying four marks that identifies the purity, jeweller name, hallmarking centre, and BIS. This is also the standard accepted norm, followed across the globe.
"I do not understand, what were the failures of the previous hallmarking system and why the new marking system or HUID and process was required to be replaced. If there was any failure of the previous system, who will be responsible for millions of jewellery pieces, which were hallmarked previously and would remain in circulation for decades and who will be the victim of those blunders? Will you also make jewellers responsible here? If there was no failure of the previous hallmarking system, then why is this new marking or HUID being imposed, when the entire jewellery sector is opposing this," Mr Singhal asks.
Based on extensive consultations with stakeholders, the Union government had decided to initiate the hallmarking from 256 districts, which have assaying marking centres.
"Gold of additional carats 20, 23 and 24 will also be allowed for hallmarking. Watches, fountain pens and special types of jewellery like kundan, polki and jadau will be exempted from hallmarking. Jewellers can continue to buy back old gold jewellery without hallmark from consumer," the government says.
Further, old jewellery can also be hallmarked as it is, if feasible by the jeweller or after melting and making new jewellery.