Jewellery Industry on the Verge of Collapse due to Arbitrary Hallmarking Process: National Task Force
Moneylife Digital Team 28 July 2021
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.
 
Comments
dhanamsankar94
3 months ago
A group of Jewllery people ailing from Viruthunagar district, Tamil Nadu, writing to you regarding your findings & difficulties in BIS Hallmarking as mandatory.
We welcomed the questionnaires and charges raised against BIS by the various State Gold Jewellery association members.

Further we write to you to add some more points for the difficulty in Hallmarking as mandatory.

Customers are asking frequent questions from ourside.

1) Is it 100% fool proof to buy Hallmarked Jewellery? Whether BIS is giving any assurance for that?
2) 99% of the people like us are using handmade jewellery only. At the Jewellers point of view, unless we melt the entire product in handmade Jewellery, it is very tough to establish the purity of the items. They are showing the evidence for that.
One letter received from BIS Technical committee people. We are enclosing a copy of that letter with this.
3) In Economic Times newspaper one article was published previously regarding the BIS Hallmarking errors. We are enclosing that paper-cut copy also.

In the above grounds the customers like us, how can we rely on the BIS Hallmarking.
Kindly give your explanations for that.
Thanking you.
dhanamsankar94
3 months ago
Shri M. Balasubramaniam

President

Tamil Nadu Jewellers Federation

M.S. Thanga Maligal

Madurai

Dear Sir,

This has reference to the letter received from the Secretary, Indian Association of Hallmarking Centres, Cochin regarding the reliability of XRF checking in the analysis of gold jewellery. It is clarified that analysis of gold jewellery using XRF machine is not a reliable method due to its limitations in the depth of penetration on the gold jewellery and thereby the results indicate only the surface purity, is also clarified that the fire assay is the most reliable and accepted method to find out the purity of gold in the gold jewellery

Thanking you,

Yours faithfully,

(K. Anbarasu) DDGS
dhanamsankar94
3 months ago
ALL THAT GLITTERS IS NOT GOLD Take A Closer Look At Your Jewellery Collection. chances Are That The Gold Contains Iridium And Ruthenium. In The Absence Of Proper Safeguards, Many Goldsmiths Across India Have Taken To Adulterating The Precious Metal To Increase Profit Margins Hemali Chhapia | TNN

Your wedding jewellery may not be as pure or as precious as you think it is Several goldsmiths across India have taken to adulterating the precious metal with iridium and ruthenium, and are getting away wi as until recently the metals failed to show up on all purity checks. It's an alchemist's dream, and the practice is becoming increasingly commonplace if you go by the stocks of the 'duplicate metals at even the smallest of karigar workshops

Both iridium and ruthenium belong to the platinum family of metals, and when mixed with gold, do not

form an alloy but sit tight in the yellow metal.

What makes the adulteration even more alarming is that the metals do not replace silver and copper, which are added to the gold during the jewellery-making process to harden the soft, malleable yellow metal As Saumen Bhaumik, general manager (Retailing) at Tanishq put it, "The two metals manage to camouflage as gold"

I tested several pieces of jewellery, and all had some amount of either iridium or ruthenium lurking inconspicuously with the gold. A 22-carat gold bangle bought in 2003 from a century-and-a-half-old jeweller-who has since then expanded from Mumbai to other parts of the country-when tested at the Indian Institute of Technology-Bombay, had 3% iridium in it

A gold chain bought from a shop in Bangalore in 2002 when tested at another citybased centre had

2:39% ruthenium, while a pair of earrings from Kerala was found to be adulterated with 4.65% of indium On an average, a piece of jewellery or a bar of gold contains nearly 5-6% of the adulterant, and manufacturers-wholesalers and retailers across India-are aware of how rampant this notorious practice is Consumers, however, are the biggest losers as they have been kept in the dark

'Most machine-made jewellery contain these adulterants Overnight, these manufacturers hit the jackpot," said Suresh Hundia, president of The Bombay Bullion Association (BBA)

The situation came to head when several refineries across India noticed that the gold bought from the market, which when melted, contained at least 6% adulterants "Some refineries complained that a blackish substance kept floating in the aqua regia (mixture of hydrochloric acid and nitric acid, which can dissolve gold)

Moreover, if they bought 1kg of gold, they were losing 50-60gm after refinement. At the time, they didn't know

where the rest of the gold was getting lost," said a Bureau of Indian Standards (BIS) official

Why it escaped detection

The practice was especially

rampant between 2004 and 2006,

when there were few checks and

balances Traditional jewellers who checked the purity of gold by rubbing it on a touch-stone, said Bhavesh Sonawata from National Refineries Private Limited, "had no clue about either iridium or ruthenium There was also very little awareness on hallmarking (Halimark is a purity certification of gold articles in accordance with Indian Standard specifications) To add to the problem, XRF machines that

are used to test the punity of gold were not calibrated to identify iridium and ruthenium It was only after an alert from the trading community that BIS conducted a survey in markets across th antry and found an extensive use of iridium and ruthenium in gold. "In 2006, we issued circular to all hailmarking centres to re-calibrate their XRF machines to look for iridium and ruthenium," said the BIS official

The results of this survey were never made public. That is when the BBA also started checking for indium and ruthenium "So, even hallmarked gold sold between 2001 and 2006 could be of dodgy quality said a member of a city-based hallmarking centre

Several jewellers beseve that the damage has already been done. During this period, tonnes of gold had already exchanged hands and consumers were unknowingly investing in 'spurious, jewellery
saharaaj
3 months ago
jewelers have called for RUDdALS
dhanamsankar94
3 months ago
ALL THAT GLITTERS IS NOT GOLD Take A Closer Look At Your Jewellery Collection. chances Are That The Gold Contains Iridium And Ruthenium. In The Absence Of Proper Safeguards, Many Goldsmiths Across India Have Taken To Adulterating The Precious Metal To Increase Profit Margins Hemali Chhapia | TNN

Your wedding jewellery may not be as pure or as precious as you think it is Several goldsmiths across India have taken to adulterating the precious metal with iridium and ruthenium, and are getting away wi as until recently the metals failed to show up on all purity checks. It's an alchemist's dream, and the practice is becoming increasingly commonplace if you go by the stocks of the 'duplicate metals at even the smallest of karigar workshops

Both iridium and ruthenium belong to the platinum family of metals, and when mixed with gold, do not

form an alloy but sit tight in the yellow metal.

What makes the adulteration even more alarming is that the metals do not replace silver and copper, which are added to the gold during the jewellery-making process to harden the soft, malleable yellow metal As Saumen Bhaumik, general manager (Retailing) at Tanishq put it, "The two metals manage to camouflage as gold"

I tested several pieces of jewellery, and all had some amount of either iridium or ruthenium lurking inconspicuously with the gold. A 22-carat gold bangle bought in 2003 from a century-and-a-half-old jeweller-who has since then expanded from Mumbai to other parts of the country-when tested at the Indian Institute of Technology-Bombay, had 3% iridium in it

A gold chain bought from a shop in Bangalore in 2002 when tested at another citybased centre had

2:39% ruthenium, while a pair of earrings from Kerala was found to be adulterated with 4.65% of indium On an average, a piece of jewellery or a bar of gold contains nearly 5-6% of the adulterant, and manufacturers-wholesalers and retailers across India-are aware of how rampant this notorious practice is Consumers, however, are the biggest losers as they have been kept in the dark

'Most machine-made jewellery contain these adulterants Overnight, these manufacturers hit the jackpot," said Suresh Hundia, president of The Bombay Bullion Association (BBA)

The situation came to head when several refineries across India noticed that the gold bought from the market, which when melted, contained at least 6% adulterants "Some refineries complained that a blackish substance kept floating in the aqua regia (mixture of hydrochloric acid and nitric acid, which can dissolve gold)

Moreover, if they bought 1kg of gold, they were losing 50-60gm after refinement. At the time, they didn't know

where the rest of the gold was getting lost," said a Bureau of Indian Standards (BIS) official

Why it escaped detection

The practice was especially

rampant between 2004 and 2006,

when there were few checks and

balances Traditional jewellers who checked the purity of gold by rubbing it on a touch-stone, said Bhavesh Sonawata from National Refineries Private Limited, "had no clue about either iridium or ruthenium There was also very little awareness on hallmarking (Halimark is a purity certification of gold articles in accordance with Indian Standard specifications) To add to the problem, XRF machines that

are used to test the punity of gold were not calibrated to identify iridium and ruthenium It was only after an alert from the trading community that BIS conducted a survey in markets across th antry and found an extensive use of iridium and ruthenium in gold. "In 2006, we issued circular to all hailmarking centres to re-calibrate their XRF machines to look for iridium and ruthenium," said the BIS official

The results of this survey were never made public. That is when the BBA also started checking for indium and ruthenium "So, even hallmarked gold sold between 2001 and 2006 could be of dodgy quality said a member of a city-based hallmarking centre

Several jewellers beseve that the damage has already been done. During this period, tonnes of gold had already exchanged hands and consumers were unknowingly investing in 'spurious, jewellery
dhanamsankar94
3 months ago
Shri M. Balasubramaniam

President

Tamil Nadu Jewellers Federation

M.S. Thanga Maligal

Madurai

Dear Sir,

This has reference to the letter received from the Secretary, Indian Association of Hallmarking Centres, Cochin regarding the reliability of XRF checking in the analysis of gold jewellery. It is clarified that analysis of gold jewellery using XRF machine is not a reliable method due to its limitations in the depth of penetration on the gold jewellery and thereby the results indicate only the surface purity, is also clarified that the fire assay is the most reliable and accepted method to find out the purity of gold in the gold jewellery

Thanking you,

Yours faithfully,

(K. Anbarasu) DDGS
dhanamsankar94
3 months ago
We, a group of people ailing from Viruthunagar district, Tamil Nadu, writing to you regarding your findings & difficulties in BIS Hallmarking as mandatory.
We welcomed the questionnaires and charges raised against BIS by the various State Gold Jewellery association members.

Further we write to you to add some more points for the difficulty in Hallmarking as mandatory.
Customers like us have many questions to be asked in this issue.

1) Is it 100% fool proof to buy Hallmarked Jewellery. Whether BIS is giving any assurance for that?
2) 99% of the people like us are using handmade jewellery only. According to Jewellers point of view, unless we melt the entire product in handmade Jewellery it is very tough to establish the purity of the item. They are showing the evidence for that.
One letter received from BIS Technical committee people. We are enclosing a copy of that letter with this.
3) In Economic Times newspaper one article was published previously regarding the BIS Hallmarking errors. We are enclosing that paper-cut copy also.

In the above grounds the customers like us, how can we rely on the BIS Hallmarking.
We eagerly expecting your valuable explanation regarding this.
Thank you.


BIS: https://drive.google.com/file/d/1xfYITqXGkQkGy99KibHyw-l8UOlQ2Rtv/view?usp=sharing
vasumogan
3 months ago
The problem is about indian's converting thr tax cheat black money to Gold, if majority pays taxes and don't indulge in black money, then this will be a no issue...the fact is all this gold industry thrives on BM.
sundarbtw
3 months ago
It is written as if jewellers were solely depending on hallmark when someone surrender their jewelry for cash. It is a baby cry. They do independent testing themselves and rely only that.
Meenal Mamdani
3 months ago
This article is very poorly written. It does not give the facts of the old system and the new system and how switching from one to another has caused such havoc.
Could one of the readers who is knowledgeable about this process care to enlighten us?
Otherwise it becomes name calling, serving no useful purpose.
vikasjain9278
3 months ago
That too after these post down lockdown, the timing is bizarre, how can thery just force this, the last two years have already been very difficult due to this pandemic situation. Already last two years the main marriage n the main season have been washed away. Even other business r suffering, very frustrating
gopaliyer1950
3 months ago
Indeed disturbing.Imbalance of stocks to be hallmarked vis vis hallmarking capacity.May be authorities ro find via media once sale is effected the jwellers send the same for hallmarking.This is ease the hallnarking load from total stocks to be hallmarked to sold stocks
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