India’s Ban on Gold hallmarked without a 6-digit code may indirectly benefit the Dubai Gold and Jewellery Market
The sale of gold jewellery and artefacts without a six-digit number, which will be prohibited in India with effect from the next month, may indirectly boost the Dubai gold and jewellery industry by raising demand for high-quality certified gold. According to industry analysts, the Indian government’s new official policy may make gold prices in the emirate more appealing to buyers.
According to a recent announcement issued by India’s Ministry of Consumer Affairs, Food, and Public Distribution, from April 1, 2023, only gold jewellery and artefacts hallmarked with a six-digit alphanumeric HUID (a unique identifier) would be authorised. Some foreign residents in the UAE have expressed opinions about the rule change and stated that the hallmarking modification will have no effect on gold carried into the UAE or on India-bound travellers.
Dubai is a significant gold trade and jewellery manufacturing centre that serves clients from all over the world, including India. Until now, jewellers could sell old hallmarked jewellery with four marks but no HUID mark alongside the six-digit HUID mark. Jewellers were reportedly allowed a year and nine months to clear their stock of four-star products. According to a ministry statement, the simultaneous selling of two types of hallmarked jewellery by jewellers was causing confusion among customers.
According to Chirag Vora, director of Bafleh Jewellers, the new hallmarking gold law in India may have no direct influence on the Dubai gold and jewellery industry because it is a different market with its own set of norms and standards. Nonetheless, India is one of the world’s top gold consumers, and any changes in its policies or demand might have an indirect influence on the worldwide gold market, including Dubai.
He noted that the Indian market is recognized for its demand for high-quality gold and that the new hallmarking laws might result in a change in demand towards gold that has been confirmed for purity and authenticity. This might assist the Dubai gold market, which has a reputation for providing high-quality gold that meets worldwide standards.
Mr.Vora went on to say that the new hallmarking laws in India may cause gold prices to rise as jewellers invest in new technology and procedures to meet the criteria. This might result in a small rise in the cost of gold products in India, making Dubai gold prices more appealing to clients. But, he stated that the total impact might be influenced by various factors such as global gold prices, currency rates, and customer preferences.
The decision on the new requirements was reportedly 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.
According to Vinay Jethwani, Partner of Meena Jewellers, the six-digit hallmarking that will be introduced in India would have no effect on gold sales in this market because buyers are already obtaining the best. He went on to say that, while purity is important for residents and visitors who buy gold from India, the gold price is lower, and there are other factors, such as excellent designs and a broad selection, that make gold purchases appealing. In this market, clients are not only certain of the quality of the gold, but they also have the option to choose designs from all over the world, he added.
Anil Dhanak, MD of Kanz Gems, expressed concern over the new decision, stating that the newly enforced gold hallmarking is arbitrary, impractical, and nearly hard for merchants to follow. He opined that it would undoubtedly harm retail sales in India. While clients may be certain of the purity of gold, he feels that it will have an impact on the people participating in the transaction. He said that as the number of hallmark centres in India is limited, it would be difficult to analyze purity in a short period of time. According to him, a smooth procedure for the hallmark market may take some time since demand surpasses supply.
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