Dangling The Carat

Hallmarking, the oldest form of consumer protection, is a symbol stamped on jewellery to confirm its quality. Though all Indian sellers hallmark their wares, they do it themselves. An independent agency makes more sense in the absence of legislation in India—unlike in most western countries—for assaying (testing gold to determine its purity) and hallmarking jewellery. Says Rajesh Khosla, a director at MMTC: "In the US, if 22 carats turns out to be 21, you're behind bars. An importer in UK assays each piece he receives. Indian exporters cannot afford to take chances. But at home, there's no legislation."

A government organisation, MMTC primarily exports its jewellery, though it has catered to the domestic market through a few exhibitions, and intends to tee off its first retail outlet by April 1996. The company has the only hallmarking unit in the country worth its name. "It was started about two years back and since then awareness about quality has increased significantly," says Khosla.

The family jeweller is suddenly not so trustworthy and the Gold Clubs plan seems timely. But with a plethora of gold 'associations' swarming the country, could this be just another number? (Delhi alone has 15-20 of them.) Says G.S. Pillai, manager (north), of WGC in India: "We want to get cracking straight away. Hallmarking operations may start by March in Delhi. We've handpicked members to set the ball rolling, but others are free to join."

 The Gold Clubs intend to bring together  manufacturers, dealers, exporters, and artisans to discuss important issues and provide solutions. Besides hallmarking, these clubs will provide information on new technology and better marketing techniques, and introduce new designs along with the National Institute of Fashion Technology. Once hallmarking begins, the WGC will also release advertisements of the Goldmark symbol which will be visible on the jewellery under a magnifying glass.

But the programme's success hinges on a totally unorganised and fragmented sector. While hallmarking should boost consumer confidence, many traders are unhappy about the proposal. For them, accepting it would amount to admitting that the quality of what they sold so far was suspect. Counters Chand Mehra, director, Mehra-sons Jewellery and Gems, one of the Gold Club's pioneer-members: "Our intention is to build consumers' faith, which in the long term will translate into greater sales."

Assaying, at Rs 20-Rs 40 per piece of jewellery, is not expensive but prices of hallmarked jewellery will be higher. A piece worth Rs 10,000 may have to be priced at Rs 12,000 because jewellers will essentially have to use the caratage specified in the hallmark. Today, most charge less for labour and compromise on purity. Will the consumers pay more? MMTC made an average of Rs 1 crore a day at its three exhibitions. "Their success proves consumers will pay more if quality is guaranteed," says Pillai.

The eight-year-old WGC, formed by mining companies from around the world, is not a law-enforcing agency but it hopes to get a Bureau of Indian Standards (BIS) certification. The BIS can do precious little. Though it has standards related to purity of metals chalked out, adherence is voluntary. There are other hurdles. What if unscrupulous operators get away with latching on a hallmarked hook to a chain of lesser caratage? "International norms, which are followed in our unit, specify which part the speck of gold to be assayed has to be extracted from, and where exactly the hallmark should appear," says Khosla. Pillai claims the Club's hallmarking units will later be open to consumers also.

Indian jewellers need to gear up and not wait till import of gold jewellery is allowed in the country. They are already rather late in considering independent hallmarking. About 700 years behind the UK.