The government is considering a new layer of traceability for hallmarked gold jewellery that could make it harder to resell stolen ornaments and prevent jewellers from reusing Hallmark Unique Identification (HUID) numbers. Under the proposed system, every hallmarked jewellery article would be marked as ‘sold’ against its unique six-digit alphanumeric HUID once a transaction is completed.
The move could strengthen consumer protection and improve transparency in the country, which is one of the world’s largest gold jewellery markets. However, jewellers are concerned that the additional compliance requirements could increase operating costs and create challenges when customers modify or exchange jewellery.
At present, every hallmarked gold jewellery article carries a unique HUID. Consumers can use the number to verify the authenticity of the jewellery through the BIS Care app.
Under the proposed mechanism:
The HUID of each jewellery article would be marked as ‘sold’ after the item is purchased.
If the same HUID is later entered against another article, the system could flag it as already sold.
Retailers buying old gold could check the HUID and transaction records before accepting the item.
A mismatch could alert the jeweller that the article may have been stolen, unauthorised or carrying a reused identification code.
Jewellers would need to maintain individual records for each hallmarked article rather than relying on bulk inventory records.
The proposed system is currently at the discussion stage. The plan could initially apply to organised retailers in urban areas before being extended to rural markets and smaller, unorganised jewellers.
The proposal comes as the government seeks greater traceability across India's gold jewellery supply chain.
India's gems and jewellery market was valued at about $85 billion in January 2026 and is projected to reach $130 billion by 2030, according to the India Brand Equity Foundation.
The organised segment, however, still accounts for a relatively small share of the market.
Organised jewellery retailers accounted for 16 percent of India's gold jewellery retail market in FY2025.
The unorganised sector accounted for 84 percent.
This makes nationwide implementation of tighter digital tracking more challenging.
The proposed ‘sold’ status could help bridge a gap in the existing hallmarking system, where an item's authenticity can be established but its transaction history may not be immediately visible.
For consumers, the proposed system could be particularly useful when buying old or second-hand gold.
If a jewellery article is presented to a retailer for resale but its HUID is already marked as sold to another customer, the transaction could trigger additional verification.
This could:
Make resale of stolen jewellery more difficult.
Discourage the reuse of HUID numbers.
Improve the traceability of individual jewellery articles.
Give retailers another tool to verify the source of old gold.
Strengthen consumer confidence in hallmarked jewellery.
Misuse of the hallmark is already punishable under Section 29 of the BIS Act, 2016. Depending on the offence, it can attract imprisonment of up to one year, a fine of at least ₹1 lakh and potentially up to five times the value of the goods involved, or both. BIS can also cancel a jeweller's registration for unfair practices involving hallmark misuse.
The jewellery industry has welcomed stronger traceability in principle, but some retailers are concerned about the practical implications.
One challenge could arise when a customer buys an ornament and subsequently asks for modifications. Changes to the design could alter the weight or specifications recorded against the HUID, potentially creating additional compliance work.
Jewellers could also face higher costs as they would need to integrate individual HUID records with their store-level inventory and billing systems.
The industry has also argued that the government should focus on curbing practices such as offering jewellery at zero making charges rather than adding compliance requirements for legitimate businesses.
At the same time, industry representatives have suggested that technology could make the system more effective.
Automated and AI-based systems could help track gold from bullion to refining and retail.
Consumers could eventually be given easier tools to verify HUIDs and jewellery weight.
Uniform standards could improve transparency in gold exchange and trade-ins.
India introduced gold hallmarking in 2000 and began making it mandatory in phases from 2021. The system now covers half of the country's 800 districts.
More than 58 crore gold articles have been hallmarked so far, with over one crore items being hallmarked every month on average.