Reports that India is considering raising the import duty on polished diamonds from 2 percent to 5 percent is a stunning development. Especially in the context of the difficult year that the local industry has endured, such a move would be shortsighted and damaging to the trade.
The Business Standard broke the story this week citing Vipul Shah, chairman of the Gem and Jewellery Export Promotion Council (GJEPC). Shah explained to the newspaper that increasing the duty would provide relief to small manufacturers who are facing competition from rising polished imports to the country.
As of yet, it is unclear whether the report is an accurate reflection of the government’s intentions. No official statement has been published by GJEPC or the Reserve Bank of India (RBI), the government body that would issue such a decree. Shah could not be reached for further comments at press time.
Sanjay Kothari, former vice-chairman of the GJEPC and a current committee member, dismissed the story to Rapaport News. He said that the council was not lobbying the government to increase the duty as such a move would be counterproductive. Kothari stressed that a duty hike was not planned.
The council therefore appears to be sending mixed messages about the proposed increase and would be well advised to issue a statement clarifying the matter. Because where there’s smoke there’s fire and the local trade has expressed its concern.
