The Hindu : Business : Purity of gold in country suspect: survey

Online edition of India's National Newspaper
Wednesday, Nov 29, 2006
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Business

Purity of gold in country suspect: survey

R. Ramabhadran Pillai

Exports of gem and jewellery double in six years

Price rice slowing down purchase from abroad `Imports rise by only 0.38 per cent from 2004-05 to 2005-06'

KOCHI: Finding out the purity of gold has always been a difficult task for the consumer.

There have been several instances of duping in the gold market. Even gold merchants have been prey to such machinations. There is an unhealthy competition in the jewellery sector, and there is the lack of a proper system to establish purity of gold jewellery, says T.S. Kalyanaraman, managing director of a jewellery shop.

The situation will change when hallmarking of gold jewellery is made mandatory, he says.

The situation in the gold market has been made bare in a recent report published by the Bureau of Indian Standards. A market survey conducted by the Union Ministry of Consumer Affairs, through the bureau, has revealed that more than 90 per cent of random samples of gold collected from 16 cities in the country failed the purity test.

Exports

India's exports of gem and jewellery recorded a 106.9 per cent growth from 1999-2000 to 2005-06 and 13 per cent growth from 2004-05 to 2005-06, says a study undertaken by the Associated Chambers of Commerce and Industry of India (Assocham).

Imports of gold and silver registered a growth of about 137.4 per cent and only 0.38 per cent in the respective periods.

Analysing the domestic and global trends in gems and jewellery, it has observed that there is a slowdown in gold and silver purchase from abroad because of sharp rise in prices.

A survey conducted among 500 households throughout India has found that only 16.34 per cent of people brought gold and silver in the year ending October 2006, whereas 51.34 per cent sold their gold ornaments during the period.

The U.S., Singapore and the UAE are some of the major export markets for India's gems and jewellery. India exported gems and jewellery estimated at $ 2.9 billion to the U.S. in 1999-2000 and $ 4 billion in 2005-06, a 49.3 per cent increase.

It is observed that there has been a negative growth in India's export of gems and jewellery to U.S. as a per cent of total exports.

India's imports of gold and silver are in accordance with the demand in the domestic and exports markets.

It imports gold and silver from various countries such as Australia, Russia, the U.K., Hong Kong, the UAE and South Africa.

During 1990-2000, India imported $ .04 billion worth of gold and silver from Australia and it increased to $ 1.8 billion during 2005-06, registering an increase of 4,573.3 per cent, according to the Assocham study.

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