 "Polished diamond import: Unkind cut for jewellers")
Concerned over the rising imports of cut and polished diamonds, despite a drastic decline in the number of operating units in special economic zones (SEZs), jewellers have urged the government to cancel the trading licences and freeze finances to such traders.
This financial year, excluding June, imports of cut and polished diamonds to SEZs saw a phenomenal growth. Data compiled by the Gems & Jewellery Export Promotion Council (GJEPC) showed a 35.5 per cent rise in the value of such imports in the first five months of this financial year at Rs 868.4 crore, against Rs 640.8 crore a year ago. June 2013, however, was a lean month for both domestic jewellery demand, as well as exports. In June, imports of polished diamonds saw a decline.
At a time when the Indian diamond processing sector is staring at prolonged Diwali holidays for workers, due to reduced business, encouraging the import of cut and polished diamonds would worsen labour sentiment. "Therefore, at our recent board meeting, GJEPC passed a resolution, that the trading licences in SEZs be revoked, and gave it to the ministry of commerce and industry. The ministry should work with other departments to direct banks to not allow funds to such entities engaged in trading activities," said Vipul Shah, chairman of GJEPC.
Shah clarified all units in SEZs weren't engaged in trading. Some genuine diamond processors should be spared and their manufacturing operations encouraged, he added.
A year ago, this practice was adopted by traders in SEZs. But acting on complaints from GJEPC, the ministry had directed the department concerned to levy a two per cent duty on the supply of polished diamond from domestic tariff areas (DTAs). This duty, however, wasn't applicable for supply from SEZs. "Traders are taking advantage of this two per cent differential duty between SEZs and DTAs, of which we have taken a serious note," said Shah.
This financial year, excluding June, imports of cut and polished diamonds to SEZs saw a phenomenal growth. Data compiled by the Gems & Jewellery Export Promotion Council (GJEPC) showed a 35.5 per cent rise in the value of such imports in the first five months of this financial year at Rs 868.4 crore, against Rs 640.8 crore a year ago. June 2013, however, was a lean month for both domestic jewellery demand, as well as exports. In June, imports of polished diamonds saw a decline.
At a time when the Indian diamond processing sector is staring at prolonged Diwali holidays for workers, due to reduced business, encouraging the import of cut and polished diamonds would worsen labour sentiment. "Therefore, at our recent board meeting, GJEPC passed a resolution, that the trading licences in SEZs be revoked, and gave it to the ministry of commerce and industry. The ministry should work with other departments to direct banks to not allow funds to such entities engaged in trading activities," said Vipul Shah, chairman of GJEPC.
Shah clarified all units in SEZs weren't engaged in trading. Some genuine diamond processors should be spared and their manufacturing operations encouraged, he added.
A year ago, this practice was adopted by traders in SEZs. But acting on complaints from GJEPC, the ministry had directed the department concerned to levy a two per cent duty on the supply of polished diamond from domestic tariff areas (DTAs). This duty, however, wasn't applicable for supply from SEZs. "Traders are taking advantage of this two per cent differential duty between SEZs and DTAs, of which we have taken a serious note," said Shah.