The government recently increased the customs duty on categories of diamond such as semi-processed, half-cut or broken, and cut and polished coloured gemstone to 7.5%, from 5% earlier, and increased import duty on jewellery articles from 15% to 20% in a move to narrow the current account deficit (CAD).
GJEPC chairman Pramod Kumar Agrawal said, “GJEPC welcomes the step undertaken by the government to narrow the current account deficit.
“The move to increase the import duty on jewellery from 15% to 20% would not only help the sector strengthen jewellery manufacturing in India, but also give a boost to jewellery exports from India, a step towards establishing Brand India jewellery.”
He added, “The import duty increase in cut and polished diamonds and processed colour gemstone from 5% to 7.5% would increase the cost of business for the sector and impact exports and trade. India, a global leader in diamond processing, is not just a hub for processing roughs, but also caters to varied forms of re-processing of diamonds and diamond jewellery. A substantial size of cut and polished diamonds sold to clientele world over, in the form of either loose or set in jewellery are imported for re-setting in new design or products as desired by the customers.
“There are broken, damaged sold goods and semi-processed stones, too, that form considerable part of import of cut and polished diamonds. This would lead to practical inconvenience and limit the business of cutting and polishing impacting large part of the employment in the sector.
“Other global trading centres such as New York, Dubai, Israel would be at an advantage and the import duty hike could encourage malpractices in India,” the chairman commented, adding, “Processed coloured gemstones, too, form significant component for jewellery, and hike in the tariff will hurt the business. GJEPC would represent the concerns to the government to find a mechanism that would help minimise the impact on exports.”
India is a predominant global leader in cutting and polishing of diamonds contributing 70% by value, 85% by volume and 92% by pieces. India exported a total of $23 billion worth of cut and polished diamonds and $9.7 billion worth of plain and studded jewellery in the financial year 2017-18.