The notification was made by the ministry of consumer affairs which till now had specified hallmark standards for gold of 24, 23, 22, 20, 18 and 14 karats. This comes at a time when gold sales by volume fell by 60% in June, the steepest fall since Covid.
“We had been urging the government to introduce hallmarking of 9 karat gold for over a year. The government’s decision will spur movement of gold in the rural areas where the budget for gold jewellery purchase is much lower than urban,” said Surendra Mehta, national secretary of the India Bullion & Jewellers Association (IBJA). He said even in urban areas, younger consumers will now buy gold jewellery.
The price of 9 karat of gold is estimated to be Rs 37,000 per 10 gm, which is much lower than Friday’s 24 karat gold rate of Rs 97,828 per 10 gm. With a 3% goods and services tax, 9 karat gold costs Rs 38,110 per 10 gm at the retail end while it crosses Rs 1 lakh per 10 gm for higher karatges.
The jewellery industry is particularly happy since the announcement came ahead of the crucial festive season when gold sales is expected to increase. Demand typically increases from Rakshabandhan in August and continues till Diwali, followed by the winter wedding season which begins from November.
India annually consumes 800-850 tonnes of the yellow metal. Of this, nearly 60% is consumed by rural India, as per IBJA. Since the Russia-Ukraine war, gold price has been on a boil and has rallied by over 25% in the last one year. Due to this, several large jewellers have recently started selling 9 karat jewellery to attract consumers. Industry executives said the hallmarking for 9 karat will help jewellers to reduce their working capital requirement which had shot up due to price surge. “Many gold jewellery units have started shifting from manufacturing high karatage jewellery to 14 karat and 9 karat jewellery. The hallmarking for 9 karat jewellery will further boost this shift,” said a senior gold trade analyst.
Suvankar Sen, managing director & CEO of jewellery chain Senco Gold, said modern designs come out smartly in 9 karat gold allowing for design innovation. “Hallmarking will give confidence to customers. It will also boost exports of gold jewellery from the country,” he said.
Mehta said BIS will take at least one month to put in place all the formalities at the hallmarking centres spread across the country for 9 karat gold hallmarking.
