India needs improvements in the hallmarking system which is essential to a successful gold monetisation scheme, the World Gold Council (WGC) said in its latest report.
It recommends a number of steps to enhance the current system which, if implemented, would rebuild trust in the purity of Indian gold, giving consumers greater confidence in the caratage of their gold purchases, the WGC said in the press release.
The report also finds that an increased confidence in Indian gold, which a rigorous and consistent nationwide scheme would deliver, has the potential to increase the country's gold exports from an existing US$8 billion to US$40 billion by 2020, added.
Since the introduction of a hallmarking standard in 2000 by the Bureau of Indian Standards (BIS) India has made good progress in developing its hallmarking system. However, only 30 per cent of Indian gold jewellery is currently hallmarked. There are widespread differences in purity and an average under-caratage of anywhere from 10% to 15%.
The lack of BIS-recognised hallmarking centres across the country is also likely to have an impact on the successful implementation of the Indian Government's gold monetisation scheme which is dependent upon the collateralisation value of gold, further added.
The report is clear the development of a more stringent system would deliver huge benefits to the Indian gold market including: increased trust amongst overseas buyers and financial markets, resulting in a larger export market, a stronger domestic market and job creation across the spectrum.