On August 10, Commerce and Industry Minister Piyush Goyal revealed the restoration of the Diamond Imprest Licence, a significant move that will provide import duty exemptions on cut and polished diamonds up to a certain limit. This announcement was made during the India International Jewellery Show (IIJS) 2024, organized by the Gem and Jewellery Export Promotion Council (GJEPC).
Restoration of the Licence: Key Benefits
The Diamond Imprest Licence allows eligible exporters to import cut and polished diamonds, including semi-processed, half-cut, and broken diamonds. Under the new provisions, exporters can import diamonds up to 5% of their average turnover from the past three years, provided they add 10% value to these imports. Notably, these imported diamonds must be used by the importer and cannot be transferred even after exportation.
Addressing Industry Concerns
The restoration of the licence comes in response to demands from the gems and jewellery sector. Previously, the absence of this licence led to a situation where cut and polished diamonds were being imported into Dubai, sorted, and then re-exported, affecting India’s exports and job opportunities within the sector.
GTRI founder Ajay Srivastava explained that countries like South Africa, Namibia, and Tanzania require rough diamonds to be processed before export. When these diamonds were imported into India, they were classified as cut and polished, attracting a 5% Basic Customs Duty. This made India’s diamond exports less competitive compared to countries like China, Vietnam, and Sri Lanka. The reinstated licence aims to eliminate this duty, enhancing the competitiveness of Indian exports.
Historical Context and Recent Developments
The Diamond Imprest Licence was previously included in the foreign trade policies of 2002 and 2009. Its reinstatement is expected to have a positive impact on the sector by making diamond exports more competitive and supporting job creation within the industry.
In his address, Minister Goyal also highlighted recent Budget announcements, noting that the significant reduction in gold and silver import duties is expected to boost the jewellery sector. He emphasized that the domestic market remains resilient and is growing rapidly, compensating for any loss in exports due to the global recession.
Support for Workforce Development
Further supporting the sector, Goyal announced the establishment of a Common Facility Centre at a special economic zone, which will provide training to 1,500 young individuals annually. This initiative aims to enhance skills and facilitate placements with over 10,000 members of the GJEPC. Currently, the centre is also training 300 physically challenged youths, including women, underscoring the government’s commitment to inclusivity and workforce development in the jewellery sector.