BIS Gold Hallmarking (2021): Certifying Purity And Building Consumer Trust In India – IMPRI Impact And Policy Research Institute

Policy Update
Sruti Halder

Background

Gold hallmarking in India began as a voluntary certification scheme run by the Bureau of Indian Standards (BIS) in April 2000, allowing jewellers to have their gold articles tested and marked for purity by BIS-recognised centres since it was started by BIS in April 2000 to provide third-party assurance to consumers on the purity of gold jewellery.

Two decades on, adoption remained patchy: as late as December 2019, only 892 assaying and hallmarking centres were spread across 234 districts, and just 28,849 jewellers had registered with BIS (BIS was running a hallmarking scheme for gold jewellery since April 2000, and as on 31st December 2019 there were 892 Assaying and Hallmarking centres in 234 district locations, with 28,849 jewellers registered). The rationale for compulsion was consumer protection: repeated purity checks by BIS in the early 2000s had found large-scale mis-selling, and the government wanted to shield buyers, particularly in small towns and villages, from being cheated on the actual carat content of the jewellery they purchased (PIB, 2019).

The government first announced compulsory hallmarking on 14 November 2019, stating it would take effect from 15 January 2021, giving jewellers a year to register with BIS and liquidate stock which were not hallmarked yet. Because of pandemic-related disruptions, the rollout was pushed to 1 June 2021, and mandatory hallmarking of gold jewellery and artefacts finally came into force on 23 June 2021 under the Bureau of Indian Standards (Hallmarking) Regulations, notified through a Quality Control Order (QCO) (BIS, 2021). The scheme initially covered three purity grades, 14, 18 and 22 carat, later expanded to include 20, 23 and 24 carat gold, with a voluntary 9-carat grade also permitted (BIS, 2026). A parallel digital layer, the Hallmark Unique Identification (HUID) system, was rolled out from 1 July 2021, assigning a six-digit alphanumeric code to every individual piece of hallmarked jewellery and automating the entire assaying workflow (PIB, 2024).

The scheme’s objectives are threefold: to certify the accurate proportion of precious metal in jewellery and artefacts, to protect consumers, especially first-time and rural buyers, from adulteration and mis-selling, and to bring transparency and traceability to India’s vast, largely unorganised gems and jewellery trade. India’s target beneficiaries include the estimated hundreds of millions of gold buyers, since India is among the world’s largest consumers of gold jewellery, as well as small and medium jewellers who gain a level playing field once certification becomes mandatory rather than a discretionary marketing tool. Smaller jewellers, who often serve exactly these rural and semi-urban markets, may also face a disproportionate compliance burden in registering and accessing distant AHCs, though no official data currently quantifies this cost gap. Key exemptions were built in to protect artisans and niche categories: jewellery below 2 grams, watches, fountain pens, and traditional Kundan, Polki and Jadau jewellery are excluded from mandatory hallmarking, and jewellers with an annual turnover below a specified threshold are given additional compliance time (BIS, 2021). Registration of jewellers with BIS is free of cost, granted instantly online, and valid for a lifetime.

Since 2021 the government has amended the hallmarking order repeatedly to widen geographic coverage in phases and to fine-tune exemptions, most recently extending mandatory hallmarking to 9-carat gold from July 2025 and to silver jewellery and artefacts from September 2025. The order has been amended at least eight times between 2021 and 2026, reflecting a deliberately phased, calibrated implementation rather than a one-time mandate.

Functioning

The scheme operates through a three-tier institutional architecture. BIS, functioning under the Department of Consumer Affairs, Ministry of Consumer Affairs, Food and Public Distribution, is the apex regulator that frames standards, registers jewellers, recognises Assaying and Hallmarking Centres (AHCs), and enforces compliance. Jewellers must register once on the BIS Manakonline portal before they can sell hallmarked articles; AHCs are independent, BIS-recognised private or institutional laboratories that physically test and mark jewellery using fire assay and X-ray fluorescence (XRF) methods, based on the Indian Standard IS 15820:2009 for establishment and operation of such centres (BIS). Every hallmarked piece receives three markings: the BIS Standard Mark, the purity grade in carats and fineness (e.g., 22K916), and the unique HUID code which consumers can verify through the BIS Care mobile application (PIB, 2024).

Funding is largely self-sustaining: jewellers pay AHCs a per-piece marking fee under the Scheme of Testing and Inspection, while jeweller registration itself carries no fee, and BIS’s operational costs are met through its own receipts supplemented by government grant-in-aid routed through the Department of Consumer Affairs’ budget (Consumer Affairs Annual Report, 2024-25). Enforcement rests on the BIS Act, 2016, which prescribes penalties of a minimum fine of ₹1 lakh, up to five times the value of the article, and imprisonment of up to one year for selling non-hallmarked gold in violation of the order (PIB, 2019). Consumers found to have purchased jewellery of lower purity than marked are entitled to compensation equal to twice the value of the purity shortfall plus testing charges under BIS Rules, 2018 (BIS, n.d.).

Because AHC infrastructure could not be built uniformly across India’s roughly 766 districts at once, BIS adopted a phased district-wise rollout instead of a single national deadline. This has been the central implementation mechanism of the scheme and is summarised below.

Source: Bureau of Indian Standards / Press Information Bureau, “Seven more districts added in 6th phase of mandatory hallmarking,” 2026.

Performance

Programme data published by BIS and PIB show consistent expansion on every implementation metric between 2021 and 2026. The number of BIS-registered jewellers rose more than five-fold, and the AHC network grew correspondingly.

Source: PIB, “Over 40 crore gold jewellery items hallmarked so far; fourth phase of Mandatory Hallmarking begins from November 5, 2024,” 2024; Manorama Yearbook, 2022.

On volume, BIS reported 8.68 crore jewellery articles hallmarked in the year 2021-2022 alone, and cumulative output has climbed sharply since. Over 40 crore gold jewellery items had been hallmarked with a unique HUID as of November 2024, and by early March 2026 this had risen to around 60 crore gold items hallmarked, according to official data, meaning roughly 20 crore additional items were hallmarked in about 16 months. However, rising volume reflects the scheme’s expanding geographic coverage and India’s growing gold market at least as much as it reflects improved compliance; BIS does not publish a compliance rate (the share of gold jewellery sold that is actually hallmarked) or a fraud-reduction metric, so absolute volume alone cannot confirm how much genuine non-compliance or purity fraud has declined. Separately, at the Department of Consumer Affairs’ testing laboratories more broadly, the number of samples tested grew by 57.37 percent and revenue increased by 42.49 percent in FY 2023-24 compared to FY 2022-23; this figure covers BIS’s quality-assurance testing infrastructure as a whole rather than hallmarking specifically, so it should be read as evidence of wider institutional capacity growth rather than a direct measure of hallmarking performance. 

As of the sixth phase in March 2026, mandatory hallmarking now covers 380 of India’s roughly 766 districts with around 60 crore gold items hallmarked to date, but with turnover-exempted jewellers, persistent counterfeiting cases like those in Assam, and no published compliance-rate or rural-usage data, the scheme’s reach appears to be steadily expanding even as its actual depth of enforcement remains only partially verifiable. 

A Parliamentary Standing Committee on Consumer Affairs, Food and Public Distribution reviewed the scheme’s functioning and, in its report presented in both Houses of Parliament, flagged specific structural gaps rather than commending the scheme unconditionally. It recommended that the government explore aligning BIS norms for precious metals and jewellery with international standards prescribed by the International Organisation of Standards to promote exports of precious metal jewellery, and it recorded concerns raised by consumer associations that some unscrupulous traders were resorting to selling jewellery without proper invoices, or splitting sales entities in the name of employees and relatives to keep turnover below the ₹40 lakh threshold that exempts small sellers from mandatory hallmarking. This points to a performance gap between headline coverage statistics and ground-level compliance among small, unorganised retailers who form the bulk of India’s jewellery trade.

Impact

The scheme’s core objective, giving consumers a verifiable, third-party guarantee of gold purity, has visibly reshaped market conduct. Under the earlier voluntary system, an early 2000s BIS survey had found that a majority of tested jewellery did not match its claimed purity; the shift to a mandatory, HUID-anchored regime represents a structural change in accountability, since purity claims are now traceable to a specific AHC and jeweller rather than resting on an unverifiable retailer promise. By design, the HUID system should make large-scale mark-copying harder, since each code is registered in a centralised BIS database at the time of hallmarking and is verifiable online in real time. However, no official before-and-after data comparing fraud or counterfeit-case rates under the voluntary versus mandatory regimes is publicly available, so this remains a plausible design rationale rather than a demonstrated deterrent effect. 

Independent verification remains imperfect, however. Recent state-level enforcement data illustrate that counterfeiting has not been eliminated: in Assam alone, three cases of counterfeit hallmarking of gold ornaments were detected by BIS enforcement raids within a three-month period in mid-2026, underscoring that fraudulent hallmarks continue to surface even five years after the mandate. This suggests the scheme has substantially raised the cost and difficulty of purity fraud without fully eliminating it, particularly outside the 380 districts formally covered and among unlicensed sellers. Consumer uptake of the verification tools built around the scheme has also grown steadily, with BIS Care app downloads crossing 82 lakh by November 2024 (PIB, 2024), indicating rising consumer awareness and willingness to self-verify purchases, an important behavioural shift underpinning the policy’s trust-building objective. 

Emerging Issues

Several structural and monitoring gaps have surfaced as the scheme has scaled, starting with the very first rollout: in mid-2021, jewellers’ associations formed a 350-body National Task Force complaining that the HUID transition had slowed hallmarking turnaround from a few hours to five-to-ten days, prompting BIS to constitute an Expert Committee to resolve the bottleneck. Several years on, related concerns around capacity, coverage, and transparency persist in different forms.

• Uneven geographic coverage: After six phases, mandatory hallmarking covers 380 of India’s roughly 766 districts (BIS, 2026), leaving a substantial number of largely rural or low-jewellery-density districts outside the mandate, where consumers still lack legal protection against purity fraud.
• AHC capacity strain: The 2021 rollout exposed a mismatch between assaying infrastructure and sudden compliance demand, with turnaround times stretching from hours to over a week; capacity additions have not consistently kept pace with each new phase of district coverage.
• Turnover-based exemption misuse: The Parliamentary Standing Committee on Consumer Affairs recorded concerns that some traders split billing across related entities to stay under the ₹40 lakh turnover threshold that exempts small sellers, diluting the mandate’s reach among the very retailers most associated with historical purity fraud.
• Persistent counterfeiting: State-level enforcement data show fake hallmarks are still being detected years after the mandate, three counterfeit-hallmarking cases were identified in Assam alone within a three-month period in mid-2026,pointing to gaps in point-of-sale verification enforcement rather than only in certification itself.
• Lack of international alignment: The Standing Committee noted that Indian hallmarking standards are not yet fully aligned with international norms prescribed by the International Organisation for Standardisation, constraining the export competitiveness of India’s jewellery sector.
• Lack of enforcement transparency: BIS does not publicly disclose complaint-resolution rates or fraud-conviction data at a granular level, making it difficult to independently assess how effectively the scheme deters purity fraud beyond isolated state-level reports such as those from Assam.
• Consumer awareness gap in rural and semi-urban markets: Despite growing BIS Care downloads (PIB, 2024), awareness and verification behaviour likely remain concentrated in urban, digitally literate consumer segments, leaving rural buyers, the scheme’s original target group, comparatively under-served; no official survey currently disaggregates hallmark awareness or app usage by rural versus urban geography, so this remains a plausible but unverified gap.
• Compliance burden on smaller jewellers: Smaller jewellers, who often serve these same rural and semi-urban markets, may face a disproportionate compliance burden in registering and accessing distant AHCs, though no official data currently quantifies this cost gap either.

Way Forward

• Accelerate district expansion with capacity-first sequencing: Future phases should ensure AHC density is scaled up in a district before, not after, the mandate takes effect there, to avoid repeating the 2021 backlog experience.
• Tighten turnover-exemption enforcement: BIS and state consumer-affairs authorities should cross-verify GST and billing data to detect entity-splitting used to avoid mandatory hallmarking, closing the loophole flagged by the Standing Committee.
• Strengthen point-of-sale verification: Promote real-time HUID scanning at the point of purchase (rather than only post-purchase verification) through incentives or requirements for jewellers to display QR/HUID-scanning facilities in-store.
• Pursue international standards harmonisation: Align BIS caratage and testing standards more closely with ISO benchmarks to support Indian jewellery exports, as recommended by the Parliamentary Committee.
• Deepen rural outreach campaigns: Extend BIS’s awareness and Dhanteras-style consumer campaigns beyond metro markets into semi-urban and rural regions where gold purchases remain high but digital verification literacy is lower.
• Institutionalise periodic third-party audits of AHCs: Given continuing counterfeiting incidents, random, unannounced testing audits of AHC output could help detect compromised or complicit centres before consumer complaints surface.
• Publish disaggregated, district-wise compliance data: Regular public disclosure of district- and state-wise hallmarking volumes and complaint data would improve monitoring, enable comparative analysis, and increase institutional accountability.

References 

About the Contributor

Sruti Halder is pursuing an MSc in Economics at the Gokhale Institute of Politics and Economics. She is committed to leveraging data-driven research and evidence-based policymaking to promote inclusive and sustainable socio-economic development. 

Acknowledgment

I am writing to express my sincere gratitude to IMPRI (Impact and Policy Research Institute) for providing me with the opportunity to prepare this policy update article and for fostering a rigorous learning environment that connects research with public policy practice.

Reviewers: Mannat Abbot, Gowri Kodali

Disclaimer

All views expressed in the article belong solely to the author and do not necessarily represent the views or policies of the organisation.

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