Special diamond trade zone to be operational soon
The special notified zone for trade in rough diamonds is set to commence commercial operations in two weeks. Diamond miners like Rio Tinto, De Beers and Alrosa are participating in the trial runs.
Spread over 4,500 sq ft at the Bharat Diamond Bourse, the government notified setting up of the special zone in Mumbai in August to ease problems faced by small diamond processors in procuring rough diamonds from overseas miners.
The trial run at the special notified zone has already begun as per the reports in Economic Times and Business Standard (BS). The move comes at a time when gem and jewellery exports from India are sliding. While in the first seven months of FY16, overall exports have dropped 12.9 per cent to 1,16,476.5 crore, exports of cut and polished diamonds have fallen 8.6 per cent to 78,795.9 crore. In volume terms, India has exported 203.5 lakh carats of diamond in the first seven months of FY16, a drop of 4.5 per cent compared with the last fiscal.
“Recently, Rio Tinto, one of the world’s largest diamond miners, conducted trials. Now trials by De Beers, another large diamond miner, are on. Russian miner Alrosa has booked place to show its rough diamonds next week. We will be looking to commence commercial operation of the special notified zone in two weeks,” said Praveen Shankar Pandya, chairman, Gems and Jewellery Export Promotion Council.
The Indian diamond trade is also making an effort to reduce the transaction cost in an effort to remain profitable. “The first trial run at the Mumbai special notified zone (SNZ) has taken place and Rio Tinto participated in it. Other mining majors such as ALROSA and De Beers have booked dates to showcase their diamonds to Indian manufacturers and a formal inauguration by Union commerce minister Nirmala Sitharaman is likely this month.”
De Beers is conducting viewings of auction lots between November 27 and December 2, ahead of its year-end auction. The range of products offered for sale is available for inspection at the special notified zone. “De Beers is hosting viewings of our auction lots in India for the first time. These viewings offer customers greater convenience in their local market, enabling them to inspect the spectrum of rough diamonds we sell,” a De Beers’ spokesperson said to BS.
Foreign miners were earlier hesitant to bring rough diamonds for display in India because of the income tax levy. On October 16, the government exempted the display of uncut diamonds (without sorting or sale) inside the special notified zone from income tax effective April 1, 2015. “These miners are allowed to book orders from clients in India for delivery of goods from their mine sites or other offices abroad. We are working with the government to sort out the tax issues on sale of goods within the special notified zone,” said Pandya.