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Import of cut and polished diamonds fell 53 per cent in January to Rs 4,852 crore from Rs 10,344 crore in the same period last year following a levy of two per cent import duty by the Government on January 16.
Mr Sanjay Kothari, Vice-Chairman, Gems and Jewellery Export Promotion Council, said polish diamond imports are expected to fall further in the coming months as these imports were happening without any real demand. “Most of these diamonds are re-exported without any value addition and are kind of circular trading. Such importers raise money from various institutions and banks on the back of these trades,” he added.
The Government, meanwhile, issued a clarification recently exempting duty re-import of cut and polished diamonds sent abroad for certification and grading. According to the notification issued by the Ministry of Commerce and Industry, a polished diamond exporter with an annual export turnover of Rs 5 crore for each of the last three years may export cut and polished diamonds abroad to any of the gemological agencies and laboratories with re-import facility at zero duty within three months from the date of export.
A huge quantity of polished diamonds is sent by Indian companies for certification abroad at Gemological Institute of America, International Gemological Institute, American Gem Society and Hoge Road Voor Diamond.
GJEPC has also represented to the Government to revoke trading licence in the diamond processing Special Economic Zones.
In first 10 months of this fiscal, import of cut and polished diamond in Mumbai SEZ has increased 56 per cent to 206 lakh carats (132 lakh carats), while in value terms it was up 93 per cent at Rs 36,449 crore (Rs 18,896 crore).
“The SEZ are set to import rough diamonds, value add by way of cut and polished or finished diamond jewellery and then export them. But, it is largely being used as a trading hub by taking advantage of the tax benefits,” said Mr Kothari.
GJEPC also wants the Government to allow mining companies such as Alrosa, Debeers to set up sales offices in India and import rough diamonds on consignment basis. Though these miners can now bring in roughs, they cannot repatriate those that remain unsold, he said.
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