According to GJF, licensing is the major issue which will hamper the growth of the jewelry industry. The BIS (Bureau of Indian Standards) licensing, which reminded jewellers of the ‘Gold Control Act’, is applicable only on the jewelry industry, echoing the times of the ‘Licensing Raj’. “We’ve seen the draconian effect of Gold Control Act, and we’re not ready for that experience again. The paperwork and procedure should be simple and transparent with the absence of taxation and rigidity in licensing system,” commented Atul Jain, director of AR Diamond Gem Grading Services. Some of the other objections raised included insufficient infrastructure and the precondition for a jeweler to have a license for selling hallmarked jewellery. Jain also mentioned that the license charges should be made affordable for the small jewelers, rather than catering to just the bigger players.
SL Palkar, regional coordinator, BIS-western region told JCK India, “Earlier the charges for licenses were Rs25,000 per year, but we are now charging the same amount for three years.” It was also necessary for BIS officials to visit the showroom prior to approval, but now the BIS requires jewelers to submit a photograph of the showroom with a declaration that they will not stock cadmium jewelry. “We issue licenses within two hours of the submission of required documents,” Palkar claimed.
Out of the 35 states and union territories in India, currently there are 106 hallmarking centres in 14 states, which have close to 5,000 licensee jewelers, according to the Indian Association of Hallmarking Centres (AIHC). An additional 12 states have more than 500 licensee jewelers, but no hallmarking centres. The remaining nine states and union territories have neither licensee jewelers nor hallmarking centres.
The four metropolitan cities of New Delhi, Kolkata, Mumbai and Chennai currently have 41 hallmarking centres. The AIHC is adding 17 to take this number up to 58 by the first week of January 2009. Industry experts say this is still a fraction of the estimated infrastructure requirement of 500 centres for the successful infrastructure implementation of compulsory hallmarking.
Remarking on the weak infrastructure issue Uday Kumar Vummidi, secretary, Gems and Jewellery India International Exhibition (GJIIE) commented, “Hallmarking will definitely facilitate the growth of the industry, but it should be made mandatory only with adequate arrangement of proper infrastructure. It should be convenient, comfortable and accessible to every jeweller.”
However, BIS deputy director general P Sengupta finds the demand for more centres baseless, as even most of the existing ones are underutilised. “Despite this, the government is providing huge financial incentives for new centres, offering subsidy of Rs1-1.5 crore on each centre.”
According to Indian Association of Hallmarking Centres’ Secretary, James Jose, only around 10 percent of the 106 existing hallmarking centres are working at full capacity. “There are huge unutilised capacities in the hallmarking centres - the average capacity of a hallmarking centre is roughly 2,500 pieces or 35 kilograms per day, which works out to 10 tonnes per annum.” Thus, the 106 centres across the country can hallmark more than 1,000 tonnes of jewellery every year, versus the actual hallmarking happening of less than 200 tonnes.
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