African Diamond Duty

The Indian diamond industry may lose its luster if South Africa, Botswana, Congo and Angola decides to go ahead with 5-7% export duty on rough diamonds. The African countries want more value for their rough diamonds to boost their local economy. They believe Indians and others have made enough money over the decades and now they want diamond polishing units to be operational in Africa to generate local employment and other services. A recent survey of the diamond industry by audit firm KPMG says India’s share of the diamond processing business will decline from 57% (by value) now to 49% by 2015. The study adds that 10% of the world’s diamonds will be locally processed by then. The duty being considered by African countries will, if levied, accelerate this trend. A few enterprising Indian firms have already started setting up operations in Africa.