Diamond Sector to Gain an Advantage From India's Foreign Trade Policy

Apr 7, 2015: The Union Minister of State for the Ministry of Commerce and Industry of India unveiled the Foreign Trade Policy (FTP) that will be in effect for the next five year term, 2015 to 2020. Diamond industry experts expressed their satisfaction with the policy, concluding that it was aimed at supporting services and exports and it would  boost the "Make in India" initiative, which is a cornerstone of the new government under the leadership of Prime Minister Narendra Modi.

The Gems & Jewellery Export Promotion Council (GJEPC), representing  one of the significant trade sectors in India, added that the policy provides the impetus to boost exports and offers a critical regulatory framework for the proposed Special Notified Zone (SNZ). The SNZ will  have a taxation regime that encourages global mining companies to sell rough diamonds directly in India and once it is operating, mining companies may bring rough diamonds, on a consignment basis, to display and sell to local buyers.

According to the GJEPC, these initiatives will provide India's diamond industry with a strong competitive advantage against other diamond trading centers, while ensuring a steady supply of rough diamonds.

There is a large segment of India's gem and jewelry sector that is MSME, or micro-, small and medium enterprises, many of whom are experiencing financial constraints and tight liquidity. The GJEPC explained that there is already a long period of time before MSMEs can record value from their foreign trade transactions, so export credit plays a significant role in facilitating business. As part of the new trade policy, there is a program for providing interest subvention on identified sectors for a period of three years and budget allocation was made available for the 2015/2016 fiscal year.

The council is the Nodal Agency for the gem sector and approves laboratories for the certification, grading and re-importing of cut and polished diamonds. So far, the agencies that have been permitted to certify and grade diamonds without  import duty to re-export include the Indian Diamond Institute Surat and the International Institute of Diamond and Grading and Research India Pvt. Ltd. Surat.

On a separate note, with the Union Cabinet approving the Pradhan Mantri Kaushal Vikas Yojana (PMKVY), which budgeted $193 million (Rs.1,500 crore) for youth skills training,  the Gems and Jewellery Skill Council of India (GJSCI) plans to train youth -- and especially those with physical or mental disabilities -- in diamond polishing and sorting. 

The GJSCI has  arranged a meeting with diamond manufacturers in the SEEPZ on April 20 to share its vision and aligns with the terms of Recognition to Prior Learning (RPL). 

Courtesy: Diamond.Net