The tariff was increased from 5 to 7.5 per cent and the Gem and Jewellery Export Promotion Council (GJEPC) believes the import duty hike will be a detriment to the cut and polished diamond industry.
GJEPC chairman Pramod Kumar Agrawal expressed his concerns stating: “[This] would increase the cost of business for the sector, and impact exports and trade.”
“There are broken, damaged sold goods and semi-processed stones, too, that form considerable part of import of cut and polished diamonds. This would lead to practical inconvenience and limit the business of cutting and polishing, impacting large part of the employment in the sector,” Agrawal said.
“A global leader in diamond processing, India was not just a hub for processing roughs, but also catered to varied forms of reprocessing of diamonds and diamond jewellery.”
The tax will also apply to half cut or broken diamonds and synthetic diamonds. Coloured gemstones will also see a 2.5 per cent increase in tax.
“Processed coloured gemstones too form significant component for jewellery, and hike in the tariff will hurt the business. GJEPC would represent the concerns to the government to find a mechanism that would help minimise impact on the exports,” he added.
The GJEPC, however, believes a concurrent increase of import duty for jewellery to 20 per cent from 15 per cent will benefit the nation.
“This move would not only help the sector strengthen jewellery manufacturing in India, but also give a boost to jewellery exports from India, a step towards establishing brand India jewellery,” Agrawal said.
According to GJEPC, India exported around US$23 billion (AU$32.6 b) of cut and polished diamonds in the last fiscal year and US$9.7 billion (AU$13.7 b) worth of plain and studded jewellery.
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