Surat: The import of polished diamonds into the country is likely to come down drastically following the doubling of duty on cut and polished diamonds from 2.5% to 5% by the central government.
There has been a sharp decline in import of polished diamonds by 16%. The value of import stood at Rs 1,000 crore in February 18 compared to Rs 1,250 crore during the same month last year.
According to the data gathered from the Gems and Jewellery Export Promotion Council (GJEPC), the import of polished diamonds from April 2017 to February 2018 decreased almost 17% compared to the same period in the previous year.
GJEPC authorities termed the government’s decision to increase import duty on cut and polished diamonds as a stumbling block in India’s chances of becoming an international diamond trading hub. The move, according to the GJEPC, will not provide a level-playing field vis-à-vis other peers such as Belgium, Dubai and Israel.
Moreover, it will have a negative impact on the ‘Shut Out’ business from the US, which has been growing fast.
Industry sources said that the Americans sell the old diamond studded jewellery and that broken and other diamonds are imported by India. In India, the diamonds are recycled and exported once again. With 5% import duty on cut and polished diamonds, the cost of imported diamonds will increase phenomenally.
Talking to TOI, GJEPC’s regional chairman, Dinesh Navadiya said, “The council is continuously in touch with the finance ministry and other departments to revise the decision on increasing import duty on cut and polished diamonds. We had supported the central government’s decision on imposing 2.5% duty on diamonds to stop round tripping. In past few years, the round tripping has completely stopped and diamonds imported in the country are of the jewellery sold by the Americans.”
