Scrap tax on diamonds from India to US: Rapaport
US-based Rapaport Group chairman Martin Rapaport has asked the Indian government to allow zero taxes on diamonds, gems and jewellery imported from India by the United States. “We are calling for the US-India bilateral trade agreement with zero import taxes for diamonds, gems and jewellery,” Rapaport said at the Mines to Market Conference organized at Mumbai to mark the 50th year of India’s Gems and Jewellery Export Promotion Council (GJEPC) recently.
India’s import tax on loose polished diamonds and gems is 2.575 per cent, whereas the US charges nothing. In addition, India’s levy on diamond jewellery imports is 31.56 per cent, compared to America’s 5.5 per cent. Rapaport added, “Reciprocity means equal import taxes at the US and Indian borders, or even better, 0 per cent at both.”
“America is and will be India’s most important market,” Rapaport said on Monday at the Mines to Market Conference. “American demand will grow significantly due to new economic policies and the US government will insist on a level-playing field,” he added, citing President Donald Trump’s policy of leveraging American power to rebalance what he considers to be unfair trade ties with large export nations such as China.
Industry sources said most of the big diamond companies have their offices in US, including New York. Even if the loose diamonds are imported through branch offices owned by Indian diamantaires, they are liable to pay import tax. US is the world’s largest diamond jewellery consumer market, having around 40 per cent market share in the $80 billion worth of annual sale. India is the largest trading partner as far as loose diamonds, jewellery and gems are concerned. The annual trade in diamonds, jewellery and gems is pegged at over $12 billion. The US imported close to $7.5 billion worth of diamonds from India, making India a net beneficiary in the partnership in 2015. India’s polished diamond exports is pegged at $24 billion per annum and the US is the largest export market.