Why Are Jewellers On A Token Strike Today?

Upset with the new hallmarking rules and regulations, Indian gold jewellers are on a token strike today on 23rd August. The 'National Taskforce on Hallmarking' consisting 350 jewellers' associations and federations is against the 'arbitrarily implemented' hallmarking process by the Bureau of Indian Standards (BIS). Amid repeated requests from the union government to withdraw the strike, jewellers are firm about their position.

Why are they upset?

Came into effect in June this year, the hallmarking rule restricts the jewellers to sell only hallmarked gold items of 14, 18, and 22 carats. Any slip from the regulation will lead them to a penalty of five times the cost of the product sold, or they will face up to a year of imprisonment.

Regarding that, the National Taskforce on Hallmarking has released a press release that states, "There have been two committees formed and almost 10 meetings held but no relief has yet been offered in writing by BIS or MoCA. BIS rather than behaving like a standard and quality assurance institution is playing the role of a revenue department, and the gems and jewellery industry has become a soft target for them. Jewellers have waited for almost two months and impractical laws have resulted in the collapse of the industry."

Additionally, the task force is worried because according to the new rule, now the jewellers will be involved solely with the Hallmarking Unique ID (HUID) determining procedure along with the assaying and hallmarking centres (AHCs). They will have to put the weight and the details of every item in the portal and send it to the AHC, which will be a lengthy and time-consuming process. Earlier, it was all upon the AHC to ascertain the purity of the gold item. Already troubled with lack of infrastructure in the AHCs, now the task force has also accused that the new regulation will bring 'Inspector Raaj' into the industry.

Commenting on that, Dinesh Jain, Member National Task Force on Hallmarking and Director - GJC and Gem and Jewellery Skill Council of India stated, "It is estimated that yearly almost 10-12 crore (gold jewellery) pieces are manufactured in India. In addition to this existing stock of almost 6-7 crore pieces is yet to be hallmarked. This takes the total count of pieces to be hallmarked in a year to almost 16-18 crore pieces. However, the current speed or capacity of hallmarking centres is about 2 lakh pieces per day. At this speed, it will take almost 800-900 days which is equivalent to 3-4 years to mark this years' production. Currently, the new marking system that is, HUID is taking almost 5-10 days to hallmark the products and the industry is on a standstill."

Although the new hallmarking system is very significant for both buyers' and sellers' interests for transparency and purity of gold, this will bring uncertainty to the small and medium scale players in the industry. Investing that lengthy period for hallmarking might lead their businesses to draw down.

Meanwhile, gold prices have been seeing some small recovery as compared to the previous days.