India introduces mandatory jewellery hallmarking; implications for Australia
Overseen by the Bureau of Indian Standards (BIS) – a governmental agency that is part of the Ministry of Consumer Affairs, Food & Public Distribution – the hallmarking policy applies to jewellers and jewellery retailers with an annual turnover of INR4 million ($AU71,480).
Jewellers with annual turnover below this threshold are exempt, as is jewellery intended for international or domestic ‘business-to-business’ exhibitions. Jewellers and jewellery retailers are also permitted to buy non-hallmarked jewellery from consumers.
Piyush Goyal, India's Minister of Commerce and Industry and Minister of Consumer Affairs, said, “Continuing our government's endeavour for better protection and satisfaction of customers, mandatory hallmarking in 256 districts will be implemented from 16 June. No penalty will be imposed till August 2021. This will help develop India as a leading global gold market centre.”
India is the world’s largest consumer of gold, and the country’s demand for gold jewellery rose to 102.5 tonnes in the first quarter of 2021, according to figures from the World Gold Council.
International hallmarking standards
The BIS first introduced hallmarking standards in 2000, with the country’s Cabinet endorsing compulsory hallmarking in 2012, however implementation of the legislation was consistently delayed.
A 2015 report published by the World Gold Council estimated that Indian gold exports could increase five-fold if the nation’s hallmarking policy was strengthened.
Recent figures indicated 30 per cent of Indian gold jewellery was marked, which has been largely attributed to a lack of Assaying & Hallmarking Centres (AHCs); there are 972 AHCs in India, for an estimated 36,000 BIS-licenced jewellers, though the number has doubled in the past five years.
Each AHC is reportedly able to hallmark 1,500 pieces per day. Five marks are required: the BIS logo, the metal fineness, the mark of the AHC at which the metal was tested, the jeweller’s individual maker’s mark, and a letter symbol denoting the year the piece was made.
Caratage marks are available for 14, 18, 20, 22, 23, and 24-carat gold, while silver jewellery may be marked 970, 925, 900, 835, or 800.
Consumers are able to take jewellery to be tested at any AHC, and jewellers may have their BIS licence cancelled or suspended if the purity is found to be invalid – a practice known as ‘under-carating’ – and may be required to compensate the consumer.
The Indian policy bears many similarities to the UK’s statutory hallmarking system, which has been in place in some form for more than 600 years.
The current UK system is regulated by the Hallmarking Act 1973, which makes it compulsory for one of four Assay Offices – overseen by the UK government’s British Hallmarking Council – to mark any item sold in the UK, whether locally manufactured or imported, that is made from gold, silver, platinum or palladium.
The Australian system
Notably, Australia does not have a government-regulated hallmarking system. Chris Sherwin, president of the Gold & Silversmith Guild of Australia (GSGA), told Jeweller this has implications for consumer protection and confidence, as well as importing and exporting of jewellery products.
“In Australia, we are self-regulating – we stamp our own work – unlike in the UK where the four Assay Offices hold all the marks. We do not have Assay Offices here,” he explained.
Sherwin noted the country came close to introducing quality marking legislation in the 1920s, but nothing came to fruition.
In an attempt to instill consumer confidence, the GSGA was independently established by members of the jewellery industry in 1988 and is affiliated with the Goldsmiths Company, which operates the London Assay Office.
Consequently, GSGA members – who number approximately 200 – are required to use four marks, as in the UK system: a maker’s mark, fineness mark, the kangaroo’s head mark of the GSGA, and a letter date mark, which matches that of the London Assay Office.
The fineness mark is based on the parts-per-thousand purity standard, as defined by Standards Australia.
“Guild members subscribe to and support the quality marking of precious metal goods in Australia,” Sherwin says.
Rather than routine testing, as in an Assay Office, the GSGA operates on a complaints basis with consumers able to submit work for testing; GSGA members found to have misapplied marks following testing are expelled from the Guild and can face penalties under Australian Consumer Law.
“Our members must pass our entry criteria and we register their individual maker’s marks. It is an identifiable and recorded Australian consumer protection system that works,” Sherwin said.
However, the vast majority of Australian jewellers and jewellery retailers are not Guild members and Sherwin notes many stamp jewellery with either only the carat purity – which is not compliant with Standards Australia – or the GSGA fineness mark and their individual maker’s mark.
Implications for the future
Sherwin called India’s introduction of compulsory marking “a wake-up call for manufacturers in Australia”.
“India is clearly looking to not only protect their own consumers, but probably increase exports to the world. It was 33 years ago that the founders of the Guild were trying to do the same thing in Australia,” Sherwin observed.
“Dare I say it, but I think Australian jewellers, generally speaking, are not seeing the bigger picture. Australia has an unregulated jewellery industry, and without a government mandate or official recognition and support, we are not going to be ‘in the game’ when it comes to import or export. It does leave us vulnerable to the flooding of imports.”
He noted that most industries in Australia were regulated by Acts of parliament, which allows them protections under Free Trade Agreements – however, this protection does not extend to the jewellery industry.
“Because Australia does not protect consumers in precious metals or jewellery, it means poor-quality material can be imported, and there's nothing to stop that happening,” he explained.
Australia also does not mandate the application of a ‘control stamp’, which is a fifth mark guaranteeing metal fineness that is applied to jewellery sold internationally.
“If I were to export jewellery to the UK, it would have to have that stamp on it in order to be on-sold by a retailer there,” Sherwin said.
When asked if Australia could adopt a government-regulated marking system in the future, Sherwin was philosophical.
“At the inception of the Guild, it was accepted that without a parliamentary Act to mandate marking of precious metal, various factors would make it nigh impossible to set up Assay Offices within Australia; the lobbying alone to get a mandated Quality Marking Act through parliament takes time, effort and money,” he explained.
“The jewellery industry at the time lacked the will and the finances, and the cost of setting up Assay Offices around Australia was then – and is now – in the millions of dollars.”
In the absence of Assay Offices and legislation, Sherwin recommended Australian jewellers consider GSGA membership in order to protect themselves and consumers, calling it “a great system – one that is the first step towards any attempt that might mandate change.”