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Industry rejoices on exemption of duty on gemstones from 5 percent

The Indian gem industry recently celebrated the exemption of import duty on coloured gemstones and is certain about maintaining its competitiveness in world jewellery sector. The country currently imports rough coloured gemstones from Bangkok, Thailand and other countries. Shri P. Chidambaram; Honorable Finance Minister tabled the Finance Bill (2007-2008) on 3rd May 2008, exempting custom duty on Cut and Polished Diamonds. In the recently announced Union Budget (2007-2008), custom duty on cut and polished diamonds was reduced to 3 percent from 5 percent. The Council had made several representations to Government on the exemption of custom duty on cut and polished diamonds.

"I had reduced the customs duty on cut &amp; polished diamonds from 5 percent to 3 percent. The Gems and Jewellery Industry had represented that the duty should be at zero percent in line with other countries. Ministry of Commerce has supported this proposal. However, if we find that the decision adversely affects the import of uncut diamonds or adversely affects employment in the cutting and polishing industry, we shall immediately review the decision. It is our intention to preserve, nurture and expand the cutting and polishing industry in India,” said Chidambaram.

Zero import duty will help in easy availability of coloured gemstones of various sizes and qualities in India, which would infuse growth and diversification of studded jewellery exports. The exports are predicted to rise with the exemption of duty on colour stones. The exports from Jaipur were around Rs.22000 crore and are expected to reach over Rs. 25000 crore till the end of the year. Nirmal Bardiya of RMC Gems said, “This is a very good move and will make outside stones available in India easily. It will provide variety for domestic as well as international markets. The prices will be competitive and will make it affordable to import these stones from abroad.” Bardiya is happy with the government’s initiative and efforts to promote the industry. Manufacturers will be able to source stones on their trip abroad, and provide clients with what they require on time, at affordable prices and earn profits.

India is currently facing labor layoff and shortage of jobs, due to completion from China and Bangkok. Vivek Kala of Kalajee Jewellery suggests that to stay in competition with these markets and to stay ahead in trade, India needs to change the way it works and work united towards achievement of the aims. Vivek Kala explains, “We think the government has delayed making this move for a long time of exempting taxes on imports. There are other problems that also need to be addressed like the provision of loans at special interest rates so that we can stay in competition and do good business in world markets. Another problem is infrastructure which needs to be addressed. Special attention should be given to tourism since it will help boost trade in cities like Jaipur where most coloured stone trade is carried on.”

REF: <a href="http://www.diamondworld.net/contentview.aspx?item=2584" target="_blank" >Gemstones freed of import duties </a>