Gold Hallmarking to Ensure Further Consolidation in Industry

SEATTLE (Scrap Monster): The latest report published by ICICI Securities says that the mandatory hallmarking requirement by the government is likely to lead to further consolidation and formalization of the industry. It must be noted that the government had made hallmarking of gold jewellery and artefacts mandatory across the country effective mid-June this year.

The research report by the brokerage firm noted that the jewellery market in the country is dominated by the unorganized sector, accounting for almost 70% of total market share. Also, rough estimates suggest that only around 30% of the country’s gold jewellery is hallmarked. In addition, only 10% of jewellers in the country are certified as per Bureau of Indian Standards (BIS) norms.

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The increasing regulatory requirements will lead to boosted consolidation in the jewellery industry. By making manufacturers oblige to legal standards, the government policy aims to protect the public against adulteration. It will make it necessary for informal players to convert their inventory to hallmarked standards. Also, the implementation of hallmarking may lead to better GST compliance in the medium term, ICICI Securities noted.