India’s gold exports can rise five-fold by 2020, says World Gold Council

Buyers from the Middle East, where hallmarking standards are stringent, have little confidence in the purity or quality of Indian gold, says World Gold Council.

 The Dollar Business Bureau

India’s gold exports can increase five times from $8 billion to $40 billion per year by 2020 with the implementation of stringent hallmarking standard of jewellery across the country, the World Gold Council said on Thursday. “A credible hallmarking system with a widespread presence of assaying and hallmarking centres is essential for both the gold jewellery industry and for the implementation of a successful monetisation scheme,” said Somasundaram P R, Managing Director, India, World Gold Council. “Hallmarking is to jewellery what ’know your customer’ norms are for financial services,” Somasundaram said at the launch of the WGC’s report on Indian hallmarking. “The trust and confidence which comes with a credible nationwide hallmarking system will underpin the growth of gold jewellery exports, boosting the Indian industry’s credibility in the global jewellery sector,” he said. Somasundaram said that building trust is a fundamental requirement if the industry wants to have a bigger role in the ‘Make in India’ ambition and eventually position India as “jeweller to the world’. “In addition, the quality of gold would be a critical element for the success of the gold monetisation scheme,” he added. According to the WGC report, even though the artisanal Indian jewellery is widely prized for its intricacy and craftsmanship, the country’s gold jewellery export is just 8% of the global market. By contrast, imports to India account for 20% to 25% of global gold demand. “This anomaly arises largely because overseas buyers, e.g.buyers from the Middle East where hallmarking standards are stringent, have little confidence in the purity or quality of Indian gold,” the report said, adding, “Hallmarking would boost the credibility of Indian jewellery and thereby drive demand from retailers and wholesalers in Western markets.” The Council said that India has made good progress in developing its hallmarking system with the setting up of the Bureau of Indian Standards (BIS). However, only 30% of Indian gold jewellery is hallmarked. There are widespread differences in purity and an average under-caratage of anywhere from 10% to 15%. The report said that the lack of BIS-recognised hallmarking centres across the country is also likely to have an impact on the implementation of the government’s gold monetisation scheme. At present, of the total nationwide gold stock of around 22,000 tonne, just 600 tonnes is monetised through loans and around 10 tonnes has been deposited at banks through the current gold deposit scheme.      

July 30, 2015 | 8:20 pm IST.

The Dollar Business Bureau - Jul 30, 2015 12:00 IST