Gem traders have sought help from government. (File)CALLS ARE going out from diamond hubs in Surat and Mumbai to their offices in Hong Kong following reports that Chinese authorities were carrying out raids following the recent arrest of a local couple on the charge of smuggling diamonds.
Sources in the gem and jewellery business in Surat told The Indian Express that a Gujarati diamond merchant was picked up for questioning by the Chinese authorities and released Tuesday night. The Gems and Jewellery Export Promotion Council (GJEPC), Gujarat Zone, has urged the government to help diamond merchants from India in Hong Kong.
Incidentally, in January 2010, 22 diamond merchants from Gujarat had been arrested by Chinese Customs officials on similar charges. Thirteen of them were brought back after then prime minister Manmohan Singh and then Gujarat chief minister Narendra Modi intervened.
The Chinese couple who work at a courier firm in Hong Kong as delivery persons were reportedly arrested on August 10 by Customs Ministry officials after they failed to show papers regarding Customs duties. Sources said 150 packets of polished diamonds allegedly being smuggled to Shenzhen were found on them, along with a small diary with names and details of the parties that had given them the diamonds and those for whom the precious stones were meant.
Based on the information provided by the couple, over 120 people, all Chinese, have reportedly been picked up for questioning and taken to Shenzhen.
Smuggling of diamonds from Hong Kong to mainland China is common to evade Customs duty of 4%. China is a hub of manufacturing of diamond-studded jewellery.
GJEPC Gujarat Zone Chairman Dinesh Navadia said, “We have come to know that Chinese officials have picked up 120 people in raids carried out at various places in different cities so far.” Claiming a Gujarati trader had been questioned, he added, “We request the Government to send a message to the Indian Embassy and instruct them to help the Indian diamond traders there.”
Many Indian diamond merchants who have manufacturing units in Surat have trading offices in Hong Kong, which is a free trade zone. To evade Customs duty, diamond trading firms in Hong Kong, many of them run by Indians with locals as staff, have been known to use courier services to send parcels to Shanghai, Shenzhen and Guangzhou in mainland China.
A Surat diamond merchant with trading offices in Hong Kong, Shenzhen and Guangzhou, told The Indian Express, “Through our sources, we have come to know that the Customs department of China had started a drive in mid-August and were keeping an eye on the movement of diamond parcels from Hong Kong to different cities in China. We have come to know that on Wednesday they started raiding diamond traders and jewellery manufacturing offices in eight cities in China like Shenzhen, Shanghai, Guangzhou etc. We are waiting for a clearer picture.”
The 22 Gujarati diamond merchants held in January 2010 in Shenzhen were accused of smuggling polished diamonds worth US $7.3 million. Nine of them were sentenced for between six months and six years.