Explained | How is hallmarking being implemented?

The story so far: The Government of India has made hallmarking of gold jewellery mandatory in the country. It is now being implemented by the Bureau of Indian Standards (BIS) in a phased manner.

With an aim to bring transparency in the jewellery trade and increase trust among consumers, the Government has also made it mandatory for the introduction of a Hallmark Unique Identification (HUID) number in every piece of jewellery.

In the first phase, it is being rolled out in 256 districts of the country, though the move was opposed by jewellers’ trade bodies.

What is HUID?

HUID is a six-digit alphanumeric code, or one that consists of numbers and letters. It is given to every piece of jewellery at the time of hallmarking and is unique for each piece.

Jewellery is stamped with the unique number manually at the Assaying & Hallmarking (A&H) centre. The hallmark consists of three symbols which give some information about the jewellery piece. The first symbol is the BIS logo; the second indicates purity and fineness; and the third symbol is the HUID.

Before buying any piece of gold jewellery, the buyer should check all these three symbols. Hallmarking & HUID are mandatory for 14-, 18- and 22-carat gold jewellery and artefacts.

Why is it being introduced?

HUID gives a distinct identity to each piece of jewellery enabling traceability. It is critical to the credibility of hallmarking and to help address complaints against adulteration.

In HUID-based hallmarking, registration of jewellers is an automatic process with no human interference. In addition to its role in authentication, it also helps check malpractice by members of the trade. According to the Government, it is a secure system and poses no risk to data privacy and security. Jewellers’ trade bodies, however, say it’s cumbersome to number each piece of jewellery and HUID cannot be engraved in tiny pieces and also that it will increase cost for consumers.

The Government has made it mandatory to sell hallmarked jewellery in the first phase in 256 districts of the country, each of which has at least one Assaying & Hallmarking centre. HUID numbers are engraved at these centres. More than one lakh jewellers are registered and daily, more than three lakh pieces of jewellery get hallmarked with the HUID number.

What does this mean for the consumer?

Given that gold plays a big role in the lives of Indians, mandating gold hallmarking is aimed at protecting consumer interests.

In an introductory note on the mandated procedure, the Department of Consumer Affairs said hallmarking of gold jewellery provides ‘third-party assurance’ to consumers on the purity of gold jewellery. Under the scheme, jewellers are granted certificate of registration to sell hallmarked jewellery and A&H centres “are recognised to assay the purity of the jewellery submitted by the registered jeweller along with declaration of purity…”

Are there concerns around the process?

Speaking to The Hindu, Somasundaram P.R., Managing Director, India, World Gold Council, said that the HUID concept is “innovative, out-of-the-box thinking and more than makes up for stepping in late with mandatory hallmarking.”

“It is the sort of global leadership India has and needs to show in gold-related reforms. Trade support is yet lacking as ‘traceability of hallmarking integrity [a consumer benefit] and financial tracking of purchases [a trade concern]’ have been combined, coupled with teething infrastructural issues and these need to be addressed urgently,” he said.

The World Gold Council is of the view that the HUID system has the potential to be rolled out globally to enhance trust in gold at the retail end and remove a strong barrier to gold-buying.

“We support this digitally supported progressive initiative that will infuse further transparency in the ecosystem and deliver a win-win solution for consumers and the Indian gold industry alike,” said Mr. Somasundaram.