 "Need special zone for rough diamond trading: Industry")
India’s Rs 2.4 lakh-crore gems and jewellery export sector has urged the Union government to create a ‘Special Notified Zone’ under the department of customs for trading of rough diamonds on a consignment basis in India.
In a pre-budget recommendation to the ministry of commerce, the Gems & Jewellery Export Promotion Council (GJEPC) said the proposed zone should be created in the heart of the diamond trading hub in this city, Bharat Diamond Bourse. If successful, it could be shifted to India’s largest cutting and polishing centre, at Surat. Creation of a world-class zone is likely to transform India into one of the largest rough diamond trading centres, similar to Belgium, Antwerp and Dubai.
India currently processes 11 of 13 roughs mined globally. But, the country is yet to be acclaimed as a trading centre, due to a cumbersome duty structure and absence of a world-class asserting, display and distribution centre.
India’s share in the world diamond market is 60 per cent in value, 85 per cent in volume and 92 per cent in pieces. Gems and jewellery export constitute 14 per cent of India’s overall merchandise export.
The zone would also widen the horizon of companies dealing in rough diamonds. Currently, 70 per cent of small and medium size enterprises in India do not participate in online auctions conducted by global miners. They buy roughs from large traders for processing.
“Once a special zone is notified, the customs department will supervise transactions being done by global miners and we will keep a record of business dealings. So, it is a win-win situation for all,” said Pankaj Parekh, vice-chairman of GJEPC and a Kolkata-based jewellery exporter.
Despite zero duty on import and export of rough diamond, global miners are uncomfortable with the sales conducted in India, which lack a proper grading system. The customs department decides the quality of the precious stones and determines their prices and duty. Since a uniform duty structure is followed elsewhere in the world for trading in roughs, a similar structure should be followed in India.
Currently, Indian traders import roughs largely to Dubai and distribute among their manufacturing units across the world. On creating of a special zone, the distribution job will be done from India.
Additionally, GJEPC has reiterated its demand to introduce a presumptive turnover tax, a uniform tax calculated on the basis of self-declared turnover and assessed on past records. Also, GJEPC urged the government to scrap the 80:20 rule, under which a minimum 20 per cent of imported gold should be mandatorily supplied to jewellery exporters.
In a pre-budget recommendation to the ministry of commerce, the Gems & Jewellery Export Promotion Council (GJEPC) said the proposed zone should be created in the heart of the diamond trading hub in this city, Bharat Diamond Bourse. If successful, it could be shifted to India’s largest cutting and polishing centre, at Surat. Creation of a world-class zone is likely to transform India into one of the largest rough diamond trading centres, similar to Belgium, Antwerp and Dubai.
India currently processes 11 of 13 roughs mined globally. But, the country is yet to be acclaimed as a trading centre, due to a cumbersome duty structure and absence of a world-class asserting, display and distribution centre.
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“Creation of a special notified zone will help miners bring roughs on a consignment basis display and book orders from local buyers. Despite India being the world's largest rough diamond cutting and polishing centre, global mining companies such as De Beers, Rio Tinto, Al Rosa and others have not opened offices here. They prefer to sell roughs to India through other major trading centres such as Belgium, Antwerp and Dubai,” said Vipul Shah, chairman GJEPC.
India’s share in the world diamond market is 60 per cent in value, 85 per cent in volume and 92 per cent in pieces. Gems and jewellery export constitute 14 per cent of India’s overall merchandise export.
The zone would also widen the horizon of companies dealing in rough diamonds. Currently, 70 per cent of small and medium size enterprises in India do not participate in online auctions conducted by global miners. They buy roughs from large traders for processing.
“Once a special zone is notified, the customs department will supervise transactions being done by global miners and we will keep a record of business dealings. So, it is a win-win situation for all,” said Pankaj Parekh, vice-chairman of GJEPC and a Kolkata-based jewellery exporter.
Despite zero duty on import and export of rough diamond, global miners are uncomfortable with the sales conducted in India, which lack a proper grading system. The customs department decides the quality of the precious stones and determines their prices and duty. Since a uniform duty structure is followed elsewhere in the world for trading in roughs, a similar structure should be followed in India.
Currently, Indian traders import roughs largely to Dubai and distribute among their manufacturing units across the world. On creating of a special zone, the distribution job will be done from India.
Additionally, GJEPC has reiterated its demand to introduce a presumptive turnover tax, a uniform tax calculated on the basis of self-declared turnover and assessed on past records. Also, GJEPC urged the government to scrap the 80:20 rule, under which a minimum 20 per cent of imported gold should be mandatorily supplied to jewellery exporters.