India Hikes Diamond Import Tax

RAPAPORT... India's Gem & Jewellery Export Promotion Council (GJEPC)has warned that the government's decision to increase import duty on diamondscould negatively affect the domestic industry. The country recently hiked the rates on cut-and-polished, semi-processed and lab-grown diamonds to 7.5% from 5%, effective immediately, the GJEPC reported last week. The government also made the same adjustment for cut-and-polished colored gemstones."The import-duty increase...would increase the cost ofbusiness for the sector, and impact exports and trade," Pramod Agrawal,chairman of the GJEPC, argued. "India...is not just a hub for processingrough, but also caters to varied forms of reprocessing of diamonds and diamondjewelry." The changes would limit business in India's cutting andpolishing sector, as customers may turn to other diamond-trading centers suchas New York, Dubai and Israel instead, Agrawal added. In contrast, the GJEPC welcomed the government's move to raise importduty on jewelry to 20% from 15%, noting it would help strengthen India'sjewelry-manufacturing sector. The hike will boost the nation's exports and help establish India as a jewelry brand, the organizationexplained. Image: Polished diamonds and tweezers