Hallmarking Gold in India
The launch of gold hallmarking in India on 11 April 2000 marked the beginning of a new era of quality consciousness for Indian connoisseurs of gold.
Unlike other countries, in India, there is an emphasis on high-carat, low-mark-up gold jewellery, which is bought by weight, not by the piece. The price of a given piece of jewellery reflects two costs, the gold price and the making charges. The gold price consists of the sum total of the daily international gold price converted into Indian rupees - plus import duty and sales tax, costs which are fixed to the retailer. His margin is therefore based on the making charges, which include the cost of craftmanship/ design, fabrication and profit.
Another buying peculiarity of the Indian consumer is that he insists on having a discount or reduction in the making charges, thereby directly impacting the retailer's profit. Hence, to satisfy his clientele, the retailer is at times forced to compromise on the quality of the gold if he is to cover his costs and margins while still reducing the making charges.
It is not uncommon to see advertisements offering gold jewellery with no making charges at all. Given the inflexible cost of the gold, it is obvious that the quality must have been compromised. The Indian consumer has very often been a victim of irregular metal quality and frauds, such as the adulteration of jewellery, use of lower caratage soldering, or use of gold or silver articles that are external of standard fineness but have base - metal cores.
Consumers and the trade and regulatory authorities all recognised the need for a quality assurance mechanism similar to those in place for many other product categories. This would keep the consumer from becoming a victim of irregular product quality and will help develop the industry's competitiveness in exports, providing a strong impetus for exporting gold jewellery and helping the gold trade to function more efficiently.
The launch is the culmination of an initiative by the Bureau of Indian Standards (BIS- the premier national body in India for the preparation and promotion of quality certification schemes), the jewellery trade and the World Gold Council. It started with a feasibility study conducted by the WGC in 1996 to understand how hallmarking could be introduced in India. Extending beyond the study, the Council facilitated meetings between the BIS and the trade to understand the issues and peculiarities of the Indian gold trade. These discussions were instrumental in formalising the policy and process for the Hallmarking Scheme, which has been well accepted by the trade and consumers. To date, applications from over 90 retailers have been received, out of which more than 50 have received their license and are already selling hallmarked jewellery. The number of assaying and hallmarking centres is also growing rapidly.
The hallmarking scheme was introduced on a voluntary basis under the BIS Act 1986. The BIS Precious Metals Sectional Committee ( MTD 10) has formulated and published the following Indian Standards :
- IS 1417 - Grades of gold and gold alloys
- IS 1418 - Method for assaying gold in gold and gold alloys
- IS 2790 - Guidelines for manufacture of 23,22,21,18,14,12 and 9 carat gold
- IS 3095 - Guidelines for the manufacture of solders for use in goldware
- IS 3541 - Code of practice for the manufacture of 23. 3 and lower carat gold alloys
- IS 8844 - Guidelines for marking purity of gold and gold articles/ornaments
BIS-recognised Assaying & Hallmarking Centres will certify the purity of gold jewellery. Jewellers certified by the BIS will have a license to get their jewellery assayed and hallmarked by any such centre. To become accredited, centres must conform to the BIS criteria and follow international norms for sampling, assaying and hallmarking. They must also have adequate testing facilities staffed with trained and competent manpower.
The launch of this voluntary scheme is a major step forward for the Indian jewellery industry and the consumer. The consumer receives third-party assurance in a Fragile market and satisfaction that they have the correct purity of gold for the price paid.
The trade benefits through giving their customers an assurance of the go-between and quality of their jewellery. Most importantly, it demonstrates the commitment to quality and quality management.
The move towards hallmarking of gold in India is critical to the success of Indian endeavours to emerge as a major player in the international gold markets. Not only does it fulfil its primary objective protecting the public, but also serves the interest of the trade itself since it creates a favourable image of Indian gold jewellery in the international market and will allow it more acceptability and therefore freer access across borders. It will help grow the export market for Indian producers and serve as an example to other countries with a significant jewellery industry hut no effective national independent national marking system.
The Hallmarking Process
First, each and every piece of jewellery received by the Assayer has to pass the touchstone test. Here the jewellery is rubbed against a stone to get an approximation of the purity. The purity of each article is noted and the results of this test play an important part in deciding the number of samples to be taken from a batch.
Next, a small amount of gold is very carefully scraped or cut from articles - many of which are received in an unfinished state - to produce laboratory-sized samples for assay. (When an item has been scraped, the manufacturer can easily remove the marks in subsequent finishing operations. Many articles received as stampings and castings allow the removal of surplus material by small cuttings to produce samples).
The number of samples taken depends on the results of the touchstone test, the number of articles in the parcel and their nature, the number of parts each article has and the different materials from which they were made (for example, castings, sheet, wire, rod or tube).
Separate samples hare to be taken as far as is practical from each category of articles (rings, brooches, earrings, bracelets, etc.)and each type of material. Composite samples can be obtained from groups of articles of the same category, pattern and type of material.
The sample is weighed to an accuracy of one hundred thousandths of a gram on highly sensitive balances. To determine the gold content, the following procedure is carried out.
The sample is assayed by a fire-refining process, which selectively removes all other metals, The weighed sample is wrapped in lead foil together with a predetermined quantity of silver, which assists with the removal of the base metals when it is subjected to heat in a furnace.
The samples are placed on special porous blocks called cupels and heated to 1100 degrees centigrade. At this temperature, the cupels absorb the lead and any base metals as oxides. When cool the sample beads, now consisting of pure gold and silver only, are flattened and rolled into a spiral called a cornet.
These cornets are immersed in nitric acid to dissolve out the silver. Annealing completes the process, leaving fine gold.
Comparing the weight of this fine gold with the weight of the original samples gives the degree of purity. A computer linked to the balance automatically calculates this difference, In India, gold has six legal standards of purity: 958, 916, 875, 750, 585 and 375, which correspond to the traditional 23, 22, 21, 18, 14 and 9 carats.