Retail jewellery players are up in arms against the new hallmarking rules, which they consider unjust and arbitrary

A National Task Force has been set up, comprising 350 Associations / Federations, representing East, West, Central, North and South zones of the entire Gems & Jewellery Industry. The objective of this committee is to ensure smooth implementation of mandatory hallmarking across the country.

Piyush Goyal, Minister of Consumer Affairs, virtually met the industry on 24th May 2021, after which an Expert Committee of around 19 members from the jewellery industry was formed.

A final meeting was called in Delhi on 15th June with all the members of the Expert Committee, BIS team and the Minister, where he held discussions with all parties. It was mandated that a High-Level Committee (HLC) be formed to look into the issues facing the industry, and an SOP be created. Mandatory hallmarking was declared from 16th June itself.

The Ministry instead, formed an Advisory Committee, headed by DG BIS, with members comprising BIS members, various Ministries, export council, consumer forum and three members from the domestic Industry. As of today, post three meetings of the Expert Committee and four meetings of the Advisory Committee, barring a few issues, no substantial resolutions have taken place, nor have any clarifications been issued. BIS is only issuing FAQs, which do not address the concerns of the industry.

Even as matters were still under discussion, BIS imposed a new marking system from July 1. This new marking has no relevance to the core objective of the BIS or Hallmarking. The SOP formed to operate this new marking system has disrupted the entire industry and has brought the business on standstill. The hallmarking that used to be conducted within two to four hours, is now taking five to 10 days. The hallmarking centres are totally incapable of handling 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 Government had appointed Niti Aayog to develop a detailed report on mandatory hallmarking after a full study of the same. The BIS has ignored the major recommendations of the Niti Aayog report.

Dinesh Jain, Director of All India Gem and Jewellery Domestic Council (GJC), representing MSME Sector & Core Committee Member of National Task Force on Hallmarking, said, “The existing stock of approximately 5 crore jewellery pieces are required to be hallmarked. At the current capacity of hallmarking centres, 100,000 pieces per day, it will take around 500 days, equivalent to 18 months to hallmark the existing stock lying with jewellers, and at the peak capacity, it would still require 250 days, equivalent to nine months, to hallmark the existing stocks. The question remains, when will be the new 12 crore pieces manufactured stock this year be hallmarked? It is worth Rs 4,50,000 crore, considering the market size of 900 tonnes. This will eventually lead to the collapse of the industry.”

Jain further said, “It is unfortunate, that jewellers require registration to sell quality product to consumers, which is unimaginable. Cancellation of registration on petty issues for mere element of non-cooperation, civil in nature, and search and seizure procedure and criminal penal provisions for a civil offence will bring about ‘Licence Raaj’ once again, and the jewellery industry will be exposed to corruption. Why is a criminal liability imposed on the jeweller who is merely selling the jewellery, and is neither producing nor hallmarking it? This is unreasonable, arbitrary and bad in law, when a jeweller has followed all the protocol issued by BIS to get jewellery hallmarked.”

Fatehchand Ranka, President, Maharashtra Sarafa Swarnakar Mahamandal, and core committee member of the National Task Force on Hallmarking, said, “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 AHCs was either cancelled or suspended for contravention of the law. How can we rely on such a system and such hallmarking centres and become victims of their failure?

“The new marking system under the guise of HUID has been introduced to monitor hallmarking centres. It is unfortunate 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 affair. How can we as jewellers accept such frivolous systems and processes adopted by BIS and allow our customers to become victims of the same?”

Yogesh Singhal, President All India Bullion & Jewellers Federation, and a core committee member of the National Task Force on Hallmarking, said, “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, till today, no action has been taken and the jeweller has been made a soft target.

“For the last 20 years of voluntary hallmarking, BIS applies four marks that identifies the purity, jeweller, 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 / HUID and process was required to be replaced? If there was any failure of previous system, who will be responsible for millions of jewellery pieces which were hallmarked previously and shall remain in circulation for decades and who will be the victim of those blunders? Will you also make the jewellers responsible here! If there was no failure of the previous hallmarking system, then why is this new marking / HUID being imposed, when the entire jewellery sector is opposing this.”

In conclusion, the Task Force states that BIS cannot change the tradition and fabric of the jewellery industry by putting the livelihood of lakhs of jewellers at stake, and thus affecting crores of dependents.  Only a handful of corporates and large retailers will survive, while the rest of the jewellers will have no choice but to wind up their business.

The members of the National Task Force on Hallmarking consist of the following delegates of the G&J Industry:

1.       Dinesh Jain - Director GJC, representing MSME sector

2.       Fatehchand Ranka - President Maharashtra Sarafa Swarnakar Mahamandal

3.       Yogesh Singhal - President All India Bullion & Jewellers Federation

4.       Mahesh Jain - President UP Sarafa Association

5.       Muthu Venkataraman - Coimbatore Jewellery Manufacturer Association

6.       Samar Kumar De - President SSBC Kolkata

7.       Prakash Kagrecha - President Mumbai Wholesale Gold Jewellery Association