Indian gold jewellers welcomed a government decision to extend the deadline for compulsory hallmarking to June 2021 to provide a cushion for the business disruption due to covid.
The decision to extend the date will not only benefit about 2.75 lakh jewellery traders, but will also be beneficial for about 15 lakh goldsmiths and workers earning their livelihood from jewellery fraternity, said Pankaj Arora, national convenor of All India Jewellers and Goldsmith Federation.
There are more than 3 lakh jewellers across the country and only 30,000 big jewellers are equipped with hallmarking facilities.
The jewellers had sought government help as meeting the regulation deadline in January next year would have required them to liquidate at least 300 tons of gold and replace them with fresh stocks within a few months.
However, sales have been flat this year amid a nationwide lockdown that was imposed to contain covid.
Neighbourhood shops abound
The hallmarking regulation is being introduced as gold retailing in India is dominated by small neighbourhood shops, who sometimes cut corners and cheat customers.
India along with China rank as the world’s two largest gold consumers.
Though the nationwide lockdown triggered by COVI-19 has been eased since July and retail shops have opened for limited hours, customers have been few and far between.
This is because of the typically lean summer season period due to absence of festivals as well as weddings. Jewellery buyers have also been put off by record high prices tracking international markets.
In the current business situation, jewellers would have need at least two years to liquidate the old stocks and to comply with the provisions of Hallmark, according to Praveen Khandelwal, Secretary General of the Confederation of All India Traders (CAIT).
Indian gold prices have breached successive record highs over the past few days and are currently around Rs 52,000/10 grams while silver is at an eight-year high of 62,000 per kilogram.
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Prices of gold and silver are expected to rise further in coming months during the upcoming festival season, when Indians typically buy some amount of gold because it’s considered to bring good fortune.
Gold prices are expected to touch Rs. 55,000/10 grams by Diwali, the festival of lights that will be celebrated on November 14 this year, Arora said.
Gold and silver prices have risen by around 30% since just prior to the lockdown that began on March 22.