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Sale of gold jewellery and artefacts hallmarked without six-digit code that’ll be banned in India from next month, may indirectly benefit the Dubai gold and jewellery market by increasing the demand for high-quality certified gold.
Industry experts also highlight this new government regulation by the Indian government may make gold prices in the emirate, relatively more attractive for customers.
A statement made by India’s Ministry of Consumer Affairs, Food and Public Distribution recently, made it clear that from April 1, 2023, only gold jewellery and artefacts that have been hallmarked with a six-digit alphanumeric HUID (a unique number) shall be permitted.
Allaying the worry of several expats based in the UAE, industry players say that the hallmarking change will have no impact on gold brought into the UAE or on India-bound travellers.
Chirag Vora, director, Bafleh Jewellers, said: “The new rule of hallmarking of gold in India may not have a direct impact on the Dubai gold and jewellery market, as it is a separate market with its own set of regulations and standards. However, the Indian market has one of the largest consumers of gold in the world, and any change in its regulations or demand can have an indirect impact on the global gold market, including Dubai.”
Dubai is a major hub for gold trade and jewellery making, and it caters to customers from various parts of the world, including India.
He explains “The Indian market is known for its demand for high-quality gold, and the new hallmarking rules may result in a shift in demand towards gold that is certified for purity and authenticity. This could potentially benefit the Dubai gold market, as it has a reputation for offering high-quality gold that is certified by international standards.”
“Furthermore, the new hallmarking rules in India may also lead to an increase in the cost of gold, as jewellers may have to invest in new machinery and processes to comply with the standards. This could result in a marginal increase in the cost of gold articles in India, which could make Dubai gold prices relatively more attractive for customers. However, the overall impact may depend on various factors such as the global gold prices, exchange rates, and consumer preferences,” underlines Vora.
It’s said the decision on the new requirements was taken after a review meeting of the Bureau of Indian Standards (BIS) held on March 3, 2023 chaired by the union cabinet minister Piyush Goyal.
Echoing similar thoughts, Vinay Jethwani, Partner – Meena Jewellers says, “The six-digit hallmarking that’ll be implemented in India will not affect gold sales in this market since consumers are already getting the best. While purity is a major factor for residents and visitors who buy gold from here, the gold price is cheaper and there are other aspects like exquisite designs and a wide range that make gold purchases attractive. In this market, customers are not only assured of the gold quality, but they also get the option to select designs from across the world.”
Up until now, old hallmarked jewellery with four marks without the HUID was permitted to be sold by jewellers along with the six-digit HUID mark.
Jewellers were apparently given a year and nine months to clear the stock of articles with four marks.
But as per a ministry statement, the simultaneous sale of two types of hallmarked jewellery by the jewellers was creating confusion in the mind of the common consumer.
Voicing his scepticism on the new decision, Anil Dhanak, MD, Kanz Jewels says, “The newly introduced hallmarking of gold is arbitrarily implemented. It is quite unpractical as well as almost impossible for retailers to implement this and this will certainly affect retail sales in India. While customers can be assured about the purity of gold, on account of this. I feel it will affect the people involved in the trade. The number of hallmark centres across India are limited and I am sceptical if they will be able to assess the purity within a short time. I feel this may take some time for a smooth process for the hallmark market since the demand outweighs the supply.”
