Dubai: In June last, India’s gold and jewellery industry passed through a defining moment – the country’s most coveted metal could be sold only after it had been ‘hallmarked’. With this one move, India made sure that gold sold anywhere in the country should stick to the same quality standards required in all the important gold trading and consuming markets.
Hallmarking is about assuring customers about what they are buying – for instance, the UAE has had compulsory certification for years now. But India, the world’s second biggest market for gold after China, had left it to the retailers to decide whether they wanted to sell hallmarked gold or not.
That’s all changed from June 16 – the government is rolling out the initiative in phases across the country. Those retailers who do not comply will have to cough up hefty penalties, which could be five times the cost of the product sold without hallmarking and even imprisonment. The move also gives Indian authorities a greater oversight into the gold sourced and sold through the retail network.
Interestingly, Indian authorities had in the past delayed the implementation on multiple occasions because of stiff opposition from certain sections of the country’s jewellery industry.
But one cannot place Joy Alukkas, Chairman of the jewellery retail network that carries his name, as one of the opponents of hallmarking rules. His stores in India had been selling certified gold for years, and Alukkas had been a vocal supporter of hallmarking being made a stringent requirement for retail-level gold sales in India.
Speaking to Gulf News, Alukkas lists why this is such a big deal for Indian jewellery.
Wouldn’t India’s hallmarking requirements for gold retailers add to cost of operations at a time when the industry is barely stepping out from the pandemic hit?
The objective of hallmarked gold is to give quality assurance to jewellery buyers, and we have always followed this process. In fact, we are glad that it is now mandatory for all jewellers because this safeguards the consumers’ interest. I don’t think a little additional effort and cost for the retailer should matter, especially when it is being done to protect the consumer interest. It is well worth the effort, and retailers big and small will veer to this view soon.
Wasn’t it the case that only the big retailers were selling hallmarked gold until now? Will the small one-store gold retailer have to bear the brunt of the hallmarking law?
Like I said, we always had the policy of offering hallmarked gold and we were actively seeking this to be a norm so that everybody is on par in terms of price and quality. We are glad the government authorities took this step rather than wait any longer.
Would this move give organised or bigger retailers a chance to gain market share?
Actually, now that it’s compulsory for everyone, it’s a level playing field; nobody can claim an advantage thanks to this. We will have to work harder to create the advantage by being unique with our product and services.
Do you think that the government will keep the 3 per cent GST (Goods and Service Tax) and import duty (7.5 per cent plus 2.5 per cent cess) charges steady?
All we can say is we hope for the best for the industry - and the many consumers who love jewellery. The government have taken some positive steps for the industry and we hope this continues by engaging the retailers in policy decisions as well.
Have gold sales recovered in India? Are you seeing a boost this festival season?
We surely have seen a boost in sales this Dhanteras, which is one of the biggest buying periods for jewellery in India. This was the best showing in the last two to three years.
I think the sentiments of consumers have changed now that India has managed to control Covid and the government is working aggressively to vaccinate the entire population at the earliest. Our sales this time prove that things are getting back to normal - we hope and expect this positive sentiment to continue.