The stringent framework will also ensure responsible sourcing, assaying and certification for the jewellery value chain.
India’s annual gold imports are 750-850 tonnes. While most gold consignments are sourced from known refiners, some quantity of either dore, or refined gold, is allegedly imported from unknown sources, probably conflict zones. The delivery standard will make it easier for the authorities to track the value chain, from mines to market.
Gold with .995 purity is considered as 24 carat with a mere 0.5 per cent of other precious metals’ in it.
A group was formed under the India Bullion and Jewellers Association (IBJA) to discuss the standard. The Gems and Jewellery Export Promotion Council (GJEPC), the Gems and Jewellery Trade Federation (GJF), finance associations and banks were part of this group. The group held four rounds of discussion, with the Ministry of Commerce to prepare a mutually acceptable draft of the India good delivery system.
“The group has recommended to the Bureau of Indian Standards (BIS) to considers .995 as the India good delivery standard for gold bars. The recommendation was affirmed by all members of the committee and also by the BIS. As the government wants to expedite the draft gold policy, we believe the facility will be available to before us by March-end,” said Rajesh Khosla, former managing director of MMTC-PAMP and the head of a group representing jewellers and bullion dealers.
Having a uniform standard will help India move imported gold through a spot exchange, a scheme announced by Finance Minister Arun Jaitley the Budget.
While the world accepts the London Bullion Markets Association-approved .999 purity 12.5 kg gold bar as the deliverable standard, China has adopted .999 and .9999 purity 1 kg gold bar as standards for delivery on exchange platforms.
However, the Multi Commodity Exchange of India (MCX) has set .995 purity as deliverable standard with premiums on gold content above this threshold. In physical markets, too, .995 purity gold (standard gold in trade parlance) is accepted for delivery.
“Around 90 per cent imported gold is of .995 purity. This means of the .995 standard is widely accepted by bullion dealers and jewellery manufacturers to make hallmark jewellery of .916 purity (22 carats in trade terms),” said Nitin Khandelwal, chairman, All India Gems and Jewellery Trade Federation.
Meanwhile, the GJEPC has tied up with MMTC to set up an institute to train skilled and unskilled manpower in assaying. All these processes are interlinked for responsible sourcing of the precious metal.