Budget doubles import duty on polished diamonds, upsets trade

Doubling of import duty on cut and polished diamonds to 5% has caused consternation among diamond traders. Though consumption of polished diamonds in the country is marginal compared to exports from it, trade worries that such imposition if reciprocated by countries which import polished diamonds from India could hamper Indian exports.

"The consumption and trading of polished stones is marginal, but 5% is a bit stiff," said Anoop Mehta, president Bharat Diamond Bourse, the hub for diamond trading in Mumbai. "A lot of loose diamonds are imported from the US consequent to melting of studded jewellery there. This trade could suffer.

"If the US or other countries like Israel choose to impose import duty on Indian polished diamonds, in reaction, that could impact India's position as the world's leading manufacturer and exporter of polished diamonds," said Mehta


A Gem & Jewellery Export Promotion Council (GJEPC) said it hadn't expected the doubling of the duty on polished stones. He said India on average imports rough diamonds worth $16 bn and exports polished diamonds worth $21 bn each year.