Government to set up special notified zone for diamond trade soon

MUMBAI: The government will soon set up a special notified zone (SNZ) to facilitate imports and trading of rough diamonds which will boost the gems and jewellery sector, a senior government official said here today.

"The Customs and the Director General of Foreign Trade (DGFT) have already issued necessary notifications for setting up the proposed SNZ. But there are some complex taxation issues which need to be ironed out and we will work with the industry to see that reasonable and rational outcome emerges, so that the zone can be operational at the earliest," commerce secretary Rita A Teaotia said.

The special notified zone is a trading centre where global miners can import and trade in rough diamonds without inviting income tax assessments. The move will help develop the country as a trading hub for rough diamonds.

At present, diamond manufacturers of Gujarat and elsewhere travel to Dubai, Belgium or Israel to purchase raw materials, thereby ramping up cost. Though as much as 85 per cent of rough diamonds are polished in the country, only 15 per cent of them are imported directly, the rest being bought by middlemen.

The zone, likely to come up in Mumbai, will give the diamond industry a strong competitive advantage against other trading centres like Antwerp, Dubai, etc, by saving time as well as foreign exchange spent on travel to these trading centres or establish offices there. It will also ensure steady supply of rough diamonds in the country.

Prime Minister Narendra Modi had announced the plan to set up the SNZ last year, and we have moved quickly to implement the same, Teaotia told reporters after inaugurating the 32nd edition of the India International Jewellery Show, which is the largest industry show in Asia.

Commenting on industry's demand for interest subvention scheme, she said, "we have limitations on the budget. Within the budget we have to identify the most needy sectors. The matter will now go to the Cabinet and decision is awaited."

Admitting that the gems and jewellery industry is passing through challenging phase, Teaotia assured continued government support to the industry.

Gems and jewellery export promotion council chairman Vipul Shah said the IIJS offers an excellent business opportunity to explore the various aspects of the gem and industry today.