At a time when diamond exports have been falling, the government has decided to exempt cut and polished diamonds imported by three laboratories in India from customs duty.
In a notification on Tuesday, the Central Board of Excise and Customs said that cut and polished diamonds imported ‘for grading or certification and re-export out of India’ by the Gemological Institute of America (Mumbai), Indian Diamond Institute (Surat) and the International Institute of Diamond Grading and Research India (Surat) would be exempt from ‘the whole of the duty of customs leviable thereon’.
India produces around 85 per cent of the world’s cut and polished diamonds, but its facilities until recently were ill-equipped to grade and certify large quantities of the precious stones, according to the Gem & Jewellery Export Promotion Council (GJEPC).
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With the upgrade of India’s facilities and this notification by the CBEC, India will soon start importing diamonds from across the world for the purpose of certification. These diamonds will have to be certified and exported again within three months if they are to be eligible for the customs duty exemption, according to the CBEC notification. In addition, strict checks will be in place to verify that the diamonds being re-exported are the same as those that were imported, failing which the customs exemption will be revoked.
The combination of being the world’s largest producer of cut and polished diamonds and now offering duty-free imports for certification will be very good for India on the global stage in the diamond market, the GJEPC said.