Diamantaires want direct sale of roughs in India

Surat: While the global coronavirus pandemic has prevented the diamantaires from visiting Dubai, Antwerp and Botswana to purchase rough diamonds to keep their units operational, industry leaders have come together to persuade the central government to pave way for moving the rough diamond sales in India.

The Gems and Jewellery Export Promotion Council (GJEPC) has urged the union government to allow the direct sale of rough diamonds by the miners at the Special Notified Zones (SNZs) in Surat as well as in Mumbai.

A presentation in this regard was made by the members of GJEPC to union finance minister Nirmala Sitharaman via video conferencing on Wednesday.

The meeting was held to discuss various issues pertaining to the gems and jewellery sector.

Chairman of GJEPC, Colin Shah told TOI, “Diamantaires in India are the ultimate buyers and we want the rough diamond sales to move here from foreign countries.

About 60% rough diamonds are routed through Antwerp or Dubai, which increases the rough diamond cost and need for people to travel.”

Shah added, “In the pandemic situation, diamantaires would avoid travelling abroad for rough purchase and the miners want to sell their roughs. For ease of doing business, this is appropriate time to allow trading of roughs in India and make it a trading hub.”

At present, the miners can only display the diamonds at the SNZ.

According to the SNZ norms, the trading entity is considered as permanent entity (PE), which attracts 40% duty on its turnover.

However, selling diamonds in the SNZ is impractical for the miners due to the high tax structure.

India currently imports about $13 billion worth of rough diamonds per annum, out of which about 60% or $7 billion worth of diamonds are imported from Dubai and Antwerp from the rough diamond dealers, auctions organised by the diamond mining companies including De Beers and Alrosa.

The diamantaires must visit Dubai and Antwerp about six to seven times in a year to purchase rough diamonds. The travel expenses, dealers commission etc. increases the cost of rough diamonds.

Chairman of Arjav Diamonds, Ashit Mehta told TOI, “This pandemic has taught us many lessons and we strongly feel that time is ripe for the industry to become ‘Atmanirbhar’. Diamantiares are customers and miners will have to come to India to sell their rough diamonds.”

Courtesy: TOI