Chain reaction: 9kt gold jewellery hallmarking to be made compulsory
Tue Sep 03 2024
India will soon make hallmarking of 9-karat (KT) gold jewellery mandatory, two people aware of the development said, prompted by Gen Z's preference for more affordable gold jewellery and a rise in chain-snatching incidents.
India is the world’s second largest gold consumer, with demand expected to touch 750 tonnes during the calendar year 2024, on account of upcoming festive seasons, as per the World Gold Council.
Gold market dominance
Indian demand has shown a 1.5% increase in the first half of 2024 compared to the previous year.
The official order is expected to be issued in a few months, following a final round of consultations with all key stakeholders, including organizations representing gold jewellery traders. The consultation is scheduled to be held on Tuesday, the first among the two persons mentioned above said.
“As part of this initiative, an instant certificate of purity will also be issued for 9 KT gold items at the time of purchase," this person said.
The price of 22 KT gold in August 2024 was ₹68,000 per 10 grams, while that of 9 KT gold ranged between ₹25,000 and ₹30,000 per 10 grams.
Rising crime
The rise in demand for low-karat gold jewellery comes amid an increase in chain-snatching incidents. According to the National Crime Records Bureau (NCRB), India witnessed a significant spike in 2022, with the numbers rising to 9,278—a 32.54% increase - from 7,000 in 2021.
“Though, being an export promotion council, we have a limited role in this matter. However, it's a welcome move, as consumers have the right to a certified gold product," said Naval Agarwal, convener of the Jewellery Panel Committee of the Gems and Jewellery Export Promotion Council (GJEPC).
“We are not opposed to the mandatory hallmarking of 9KT gold items," Agarwal said.
“Earlier, the market was dominated by 22KT, then it shifted to 18KT, and now the major market has shifted to 14KT. There is a possibility that the market will further shift towards 9KT as it is becoming popular among consumers due to its affordability. We are introducing mandatory hallmarking of 9 KT to protect the interests of consumers," the second person said.
Minimal stocks
"Currently, major retailers stock only minimal amounts of 9KT gold items. However, once mandatory hallmarking is implemented, they will be required to carry a more substantial selection on their shelves. This will significantly benefit consumers by increasing the availability of affordable, certified gold products," this person said.
Queries emailed to consumer affairs ministry, BIS and Retail Association of India remained unanswered till press time.
The demand for gold is expected to pick up in the second half of the year when a series of festivals kick in. India is a major importer of gold. According to research by CEIC and Bank of Baroda, the total value of gold imported into India stood at $45.5 billion in FY24, up from $35 billion in FY23. India imports gold primarily from Switzerland, the UAE, Peru and Ghana.
Source: https://www.livemint.com