Mark your dates for 4th Asia Pacific Precious Metals Conference on 07-09 June 2020 at Mandarin Orchard, Singapore..., Mark your dates for 17th India International Gold Convention on 03-05 Sept 2020 at Radisson Blu Resort & Spa, Udaipur...
 You are here : Home > Expert Column

Post-election, Gold policy implementation will start, although in a phased manner

Surendra Mehta, National Secretary, IBJA

Congratulations on successful completion of IIBS 2019. IBJA has launched several new initiatives at the Summit. Can you please elaborate them for our readers?

Thanks for the compliment on successful completion of IIBS-2019. As you are aware, we have launched India Jewellery Week, Zaveri Bazar Festival a B2B event. This will help manufacturers to reduce their cost of exhibiting and marketing their product for wholesalers and retailers. Let me say proudly that we have been able to bring down the cost of exhibiting jewellery in India Jewellery Festival vis-à-vis trade exhibitions by about 90%. This festival saw huge response from retailers across the country.  Nearly 1400 retailers visited this 7-day event at Zaveri Bazar.


The retailers could buy jewellery along with gift worth upto Rs. 1.5 crore without any hassle of and going through securities and limited time for exhibitions.


We have also launched B2C festival called India Jewellery Festival in Mumbai, Navi Mumbai and Thane on an experimental basis. Our retail customers have an option to receive gifts upto Rs.1.25 crores by shopping at 300 jewellers who has enrolled for India Jewellery Festival. This festival has started from GudiPadwa i.e. 6th April, 2019 and will last till 7th May, 2019 i.e. AkshayTrutiya. Currently nearly 7000 gifts coupons each day are been received by us through jewellers, which itself shows success of this festival.


We are about to launch “IBJA Accredited Stores” across the country. We are in the process of finalizing the frame work of such stores and we expect the first store to be launched by 1st week of July, 2019. We have ambitious plan of setting the 2500 stores across India which will cover even the smallest town. We are sure IBJA Accredited Store will give new lifeline to small and mid-size jewellers. 


1.     IBJA has also planned several marque jewellery shows during the rest of the year to celebrate its 100th year. Briefly can you highlight some of them and the purpose behind these shows.

As stated, above B2B show i.e India Jewellers Week and B2C show i.e India Jewellery Festival will be our permanent event henceforth. We plan to expand both these shows in other states also. The main purpose behind B2B show is to reduce the cost of exhibiting the jewellery. The main purpose behind B2C show is to encourage and attract customers to buy jewellery and invest in gold.


2.     Let’s us move to the industry related issues... With the draft gold policy already in place, everyone expects government to move into action mode post-elections. What do you expect from government on policy implementation front?

Yes, the draft of the whole policy is already in its place and we expect government to come out with the policy post elections. However, in my opinion the policy implementation will be in the phased manner like setting of spot exchange, mandatory hallmarking, etc.


3.     India Good Delivery is very critical for both spot exchange as well GMS. Where are we now? Would we see the standards in place by 2019? Most important, on the implementation, what is the modality that IBJA has proposed?

India good delivery standards have been prepared by IBJA along with World Gold Council, Association of Refiners and Miners, bankers, commodity exchange, etc. the draft of India good delivery has been submitted to Bureau of India Standards (BIS). We are in the final stage and we can see that the same draft is approved and implemented by BIS in next 2-3 months’ time.


IBJA has already circulated this draft to all the stakeholders for their comments and suggestions. We have proposed that India Good Delivery is accepted by all the exchanges and banks. I am very hopeful that India good Delivery will set a new dimension to Indian Bullion Market.


1.     Gold spot exchange... In simple words, can you explain as to how would it help a jewellery manufacturer or a jewellery retailer? Is there a scope for retail investors to access the spot exchange?

Currently jewellery manufacturer needs to buy bullion either through the bank under Gold Metal Loan (GML) or from a bullion dealer. While the GML becomes an expensive affair at times, the quality gets compromised when local brand is purchased from bullion dealer except few reputed brand. Hence, we have proposed that all buy and sell of bullion in the country must be routed through spot exchange. The same system exists in many other countries where OTC market has gone down as spot exchange brings transparency to the trade. The exchange also enables us to discover real gold price and it also helps in procuring quality material.


I am sure with India good Delivery & Spot Exchange in its place, the import of gold will surely go down by 10-15%. However, this would increase the turnover of exchange by not less than 10 times of the current turnover.


2.     Sovereign Gold Bond has had good response two years ago. However, of late it has not been able to scale up. What are the key challenges? Any suggestions from IBJA?

Interest on sovereign gold bond (SGB) must be exempted for the success of gold bond. Further, government must allow deduction in income, say upto Rs. 50,000 per annum if invested in sovereign gold bond. Further, there are no market makers for the sovereign gold bond in the stock exchange due to which the volume of SGB is not seen on the exchange. An initiative by the exchanges to encourage market makers is needed for the success of SGB.


3.     Hallmarking has been your pet subject. with compulsory hallmarking in place, how is IBJA supporting its members spread across the country in complying with the regulation? Are you planning specific awareness programmes with agencies such as BIS?


Mandatory hallmarking can only bring level playing field between big and small jewellers, I see the big hope for the small and mid-size jewellers once the mandatory hallmarking is in its place as they will be able to compete with big jewellers in terms of labour charges as quality remains same on both the counters.


IBJA has offices in 27 states as of now, we have started the process of decentralizing all our state offices and have already started BIS seminars with BIS agencies for the awareness amongst jewellers. IBJA Accredited Stores will bring more of hallmarking awareness amongst the jewellers.

Disclaimer: Views are personal and not the views of the publisher.