Indian Govt to Raise Import Duty on Cut and Polished Diamonds

(IDEX Online News) – The Indian government plans to more than double import duty on cut and polished diamonds to five percent from the current two percent in a bid to protect the interests of the country’s small diamond manufacturers.

Notification about the rise is expected this week, according to the Business Standard newspaper.

Gems & Jewellery Export Promotion Council (GJEPC) data show that imports of cut and polished diamonds almost doubled in the first six months of the current fiscal year, hitting domestic manufacturing.

The rise in imports of cut and polished diamonds poses a threat to the domestic manufacturing industry, mostly to small-scale manufacturers, said GJEPC Chairman Vipul Shah.

The blow to manufacturing from higher exports could also lead to small firms laying off skilled labor to competing industries, such as textiles and agriculture.

"Around 1,000 units in Surat alone have been shut down due to the lack of profit,” said Govind Dholakia, a Surat-based diamond manufacturer and exporter. “More are on the verge of closure as the import of cut and polished diamonds has reduced manufacturing opportunities for domestic processors," he added.