Compliance Map

India's precious metals sector is worth over $75 billion annually, making it one of the largest gold and silver markets in the world. With millions of consumers purchasing jewellery for weddings, festivals, and investment, the regulatory framework governing this industry has a direct impact on prices, product quality, and consumer trust. Understanding compliance is not just a concern for businesses — it shapes the final cost that every buyer pays at the retail counter.

Over the past decade, India's gold and silver trade has undergone a decisive shift from an informal, cash-driven economy to a structured, formally regulated one. Two landmark policy changes accelerated this transformation: the mandatory BIS hallmarking of gold jewellery (effective June 2021), which ensures purity standards across every retail outlet, and the classification of jewellers and bullion dealers as reporting entities under PMLA (Prevention of Money Laundering Act), which brought the sector under the supervision of FIU-IND for anti-money laundering compliance.

The regulatory burden varies significantly across the five main activity categories in the precious metals value chain. Retail jewellers face hallmarking and DPMS registration requirements. Bullion traders must comply with KYC norms and file suspicious transaction reports. Importers operate under strict licensing from RBI and DGFT. Refiners need BIS IS 17278 certification and environmental clearances. Mining companies must navigate state-level mining leases plus central environment and forest clearances. Each category carries its own set of costs, timelines, and renewal obligations.

DPMS registration with FIU-IND deserves special attention. Since 2023, every jeweller and bullion dealer handling transactions above specified thresholds must register as a Designated Person in Metals and Stones. This means maintaining customer identification records, filing Cash Transaction Reports (CTRs) for transactions above 10 lakh, and reporting suspicious activities. For the roughly four lakh jewellers operating across India, this represents a fundamental change in how they conduct business — and the compliance costs inevitably get passed through to consumers.

The India International Bullion Exchange (IIBX), operational since July 2022 in GIFT City, has introduced a regulated alternative to the traditional bank-dominated import channel. By allowing qualified jewellers to import gold directly, IIBX has increased competition and transparency in the supply chain. However, IIBX participation requires meeting stringent net worth and compliance criteria, which limits access to larger, well-capitalised businesses.

Ultimately, every layer of compliance — from hallmarking fees and PMLA registration costs to import duties and GST — adds to the spread between the international gold price and the retail price an Indian consumer pays. Understanding this compliance map helps buyers appreciate why domestic gold and silver prices carry a premium over global benchmarks, and why purchasing from properly registered, BIS-hallmarked dealers is worth the modest extra cost for the assurance of purity and legal recourse it provides.