Gold trade Hallmarking will boost consumer confidence
Hallmarking of gold jewellery has largely been a voluntary trade practice since its introduction in 2001. In a few instances, the prevalent practice...
Hallmarking of gold jewellery has largely been a voluntary trade practice since its introduction in 2001. In a few instances, the prevalent practice till date was also for jewellers to have their personal hallmarks.
However, with the Government of India mandating the BIS hallmarking of gold jewellery from January 1, 2020 on a nationwide basis, the trade is all set to transition to the implementation of a uniform set of industry-accepted product standards which will boost consumer confidence in the segment.
Placing greater onus on transparency and accountability, the initiative will greatly reduce instances of consumer victimisation and cheating at the hands of fraudulent players who indulge in malpractices.
As inferior quality gold jewellery products are phased out of the supply chain, consumers will be in a position to make informed purchase choices with the assured availability of certified premium quality products.
This will reduce the trust deficit and restore customer goodwill in the market which holds the potential to drive sales volumes on a higher growth trajectory. Once key systems and processes are in place and ready to be implemented with immediate effect, both the demand and supply of jewellery is expected to witness a steady growth.
With the roll-out of hallmarking, introduction of purity standardisation across product categories in the gold jewellery trade will become an accepted norm. The initiative will also lay the broader groundwork to facilitate the shift to a more organised trade format and create a level-playing field for the jewellers.
It is the inherent right of the consumer to demand hallmarked jewellery with high purity specifications. There can be no compromise on quality standards. All the stakeholders in the business should take the initiative to drive a mass consumer education campaign and raise awareness levels among consumers to insist on buying gold products with a certified BIS hallmark.
It is also the duty of the government to ensure that best practices are followed and adhered to by hallmarking centres while assaying the jewellery to ensure uniformity in grades and standards.
Hallmarking has the potential to plug the systemic loopholes in the organised jewellery trade. The measure should be made more robust by the government through the roll-out of a digital racking mechanism to install a system of checks and balances to oversee the movement of the hallmarked jewellery. This will diminish the menace of unauthorised transactions and restore consumer faith and confidence in business transactions.
As an additional layer of protection and security, barcodes on hallmarked gold jewellery should be made mandatory. This will help in avoiding the infiltration of fake certification of gold jewellery hallmarking into the supply chain. The implementation of a digital infrastructure will make the supply chain fool-proof and benefit organised players in the trade in a big way.
As a global policy compliance initiative, hallmarking also has the potential to play a pivotal role in positioning India as a leading gold consumption hub and drive substantial investments in the sector.
- MP Ahammed
(The author is Chairman, Malabar Gold & Diamonds)