Bullion traders of Udaipur went on a token strike on Monday, 23 August, in silent opposition to the government’s Hallmarking Unique ID system that was made effective in June 2021.

The Bureau of Indian Standards, BIS had arbitrarily implemented mandatory hallmarking process in the country. Bullion traders have put forth their concerns in a memorandum addressed to Arjun Meena, the Member of Parliament from Udaipur. We elaborate below the concerns raised by the executives of the jewelry traders body in Udaipur.

Compromise on Data Privacy and Business Secrecy

As per Yashwant Aanchaliya, the President of the Sarafa Association in Udaipur, HUID is a destructive process, and it offers no safety of jewelry. The implementation of cancellation of registration, penal provisions, search and seizure will ultimately lead to Inspector Raaj in the industry, he added.

Yashwant further added that the HUID is against customer interest and against the principles of doing business. With the HUID tracker, business secrecy and data privacy will be compromised and shall ultimately lead to harassment of customers and MSME jewelers.

Impractical timelines and process cycle

Inder Mehta, patron of the Sarafa Association of Udaipur explained in numbers and timelines how the entire process cycle is time consuming and impractical.

Total number of jewelry pieces manufactured across India is approximately 10-12 Crores per annum. The existing pieces that are yet to be hallmarked are approximately 6-7 crore in number. This takes the total count to 16-18 Crore pieces of jewelry that has to be hallmarked for 2021-22.

The current hallmarking centers are operating at a consolidated speed/capacity of 2 lac pieces per day. At this speed, it will take approximately 900 working days for the process to be completed for the new production of the existing year plus the existing stock, which means at least 4 calendar years.

Further, the new HUID is taking 5-10 days for the process, which has resulted in a major bottleneck and has taken the industry, which like others is struggling with the lockdown, to a standstill. The higher turnaround period for a manufacturer will eventually result in poor ROI and loss of employment for thousands of artisans. This will eventually increase the cost of jewelry for the end customers.

Penal consequences and Inspector Raaj

The memorandum says that the penal and criminal consequences on the jewelry traders will work on a single stroke of the BIS Officer. The jewelry trader, who is not the manufacturer or the hallmarker of the piece, and is just a seller, will face the final consequences. The businesses will fear closure due to the Inspector Raaj, a trend, which already seems to have begun. The draconian provisions of cancellation of registration for a civil offense imposed on this trade, will result in livelihood of millions of traders, craftsmen and their dependents.

The jewelers have, however, welcomed the hallmarking and the growth in registering has gone up from 34,000 to 80,000, which is an increase of 250% - it signifies the jeweler’s commitment towards their customers. However, with the reduction of hallmarking centers, the HUID system has created the bottleneck.

As per the memorandum, the Hallmarking process (HUID) involves cutting, melting and scrapping of jewelry, which is meant for sale. The entire process of hallmarking is defeated when jewelry is damaged. This process also eliminates the instant customer friendly services, which is the biggest USP of this sector. Further, the removal of the jeweler’s name from the jewelry will be detrimental to the interest of the customer if they wish to sell or exchange their jewelry, as their will be no identification of source.

The memorandum says that the Hallmarking should be based on point of sale, while all other applications, viz. storage, display, transit, exhibit to sell, manufacture, etc except sale, be removed from the BIS Act and Regulations.

The current HUID will affect not only the end customer, but also the approximately 5 crore dependents of the Gems and Jewelry industry, whose livelihood will be at stake due to the impracticality of the new compliances.