Hallmarking of 9KT Gold

• 03 Sep 2024

Source: LM

Why in News?

India is set to implement mandatory hallmarking for 9-karat (KT) gold jewellery, a move prompted by rising consumer preferences for affordable gold. This new regulation aims to ensure quality and protect consumers amid a booming gold market. 

Why is 9KT Gold Hallmarking Being Made Mandatory? 

• Rising Consumer Preferences: The growing preference for more affordable gold jewellery has led to a surge in demand for 9KT gold, which is less expensive compared to higher purity gold.
  • The purity of gold is measured in karats, with the purest gold having 24 karats, indicating no other metal is mixed with it.  
  • As the karat count decreases, it signifies the presence of other metals, typically copper and silver, mixed with the gold. For instance, 18 karat gold contains 75% gold and 25% other metals. 
• Increasing Chain-Snatching Incidents: A rise in chain-snatching cases has heightened the need for regulated and certified gold products. The National Crime Records Bureau (NCRB) reported a 32.54% increase in such crimes in 2022. 
  • Hallmarks provide a unique identifier for each piece of jewellery, making it easier to trace stolen items. This can deter thieves who know that marked items are more easily tracked.

Note: India is the world's second-biggest gold consumer after China, with demand expected to touch 750 tonnes during the calendar year 2024, as per the World Gold Council. 

• In 2022, India exported USD 9.22 billion worth of gold jewellery, accounting for 8.1% of the world’s total gold jewellery exports. The country stood fourth in terms of gold jewellery exports. 

What is Hallmarking? 

• About: Hallmarking is the official recording of the precious metal content in articles, used as a guarantee of purity.  
  • The objectives are to protect the public and obligate manufacturers to maintain legal standards. In India, gold and silver are currently under the Hallmarking Scheme. 
  • The hallmark will be valid for the entire life-time of the hallmarked jewellery. 
• Working Procedure: The Bureau of Indian Standards (BIS) under the BIS Hallmarking Scheme has mandated that all hallmarked gold jewellery and artefacts must carry a 6-digit alphanumeric Hallmark Unique Identification (HUID) number. 
  • This HUID aims to improve consumer confidence and ensure better traceability of gold products. 
  • As per this scheme, registration is granted to the jewellers by BIS. The BIS certified jewellers can get their jewellery hallmarked from any of the BIS recognized Assaying and Hallmarking Centres. 
    • Each hallmarked gold jewellery item is assigned a unique HUID number. 
  • Consumers can verify the authenticity of gold jewellery by entering the HUID number into the BIS CARE app, which provides details about Jeweller, Purity and Hallmarking Centre. 
• Importance: If a hallmarked item is found to be of lower purity than stated, buyers are entitled to compensation under BIS Rules 2018.  
  • Hallmarking provides traceability and ensures consumers are protected from fraud and counterfeit goods. 

Note: The purity of diamonds is typically referred to as clarity, which measures the presence of internal or external imperfections, known as inclusions and blemishes, respectively. 

• To determine the clarity, experts examine the diamond using a high-magnification microscope and eye visibility with a power lens, grading it on a scale from Flawless to Imperfect based on internal inclusions and external blemishes. 
• A carat is a unit of weight used to measure the weight of a gemstone such as a diamond. While karat measures the purity of a gold alloy in relation to 24 parts of gold.

UPSC Civil Services Examination, Previous Year Question (PYQ)

Prelims 

Q. What is/are the purpose/purposes of Government’s ‘Sovereign Gold Bond Scheme’ and ‘Gold Monetization Scheme’? (2016) 

1. To bring the idle gold lying with Indian households into the economy. 
2. To promote FDI in the gold and jewellery sector. 
3. To reduce India’s dependence on gold imports.

Select the correct answer using the code given below:  

(a) 1 only

(b) 2 and 3 only  

(c) 1 and 3 only  

(d) 1, 2 and 3 

Ans: (c) 

Exp:

• Sovereign Gold Bond Scheme and Gold Monetization Scheme were launched by the Government in 2015. The main objectives of these schemes are: To mobilize the gold held by households and institutions in the country. Hence, 1 is correct. 
• To provide a fillip to the gems and jewellery sector in the country by making gold available as raw material on loan from the banks. To be able to reduce reliance on import of gold over time to meet the domestic demand. Hence, 3 is correct.  
• To promote FDI in gold and jewellery sector is not the objective of these schemes. Hence, 2 is not correct. Therefore, option (c) is the correct answer.