Diamond Hub Upbeat At Duty Cut

Times News Network writes:

Surat's dream to shine brighter on the global diamond map — as a one-stop shop for sparklers — just moved yet another step closer to reality. This diamond manufacturing hub now has a shot at emerging as the global trading hub as well thanks to the Centre's decision to scrap customs duty on cut and polished diamond imports.

The decision promises to propel India into the league of global diamond trading hubs like Belgium, Israel and Hong Kong. After all, if 11 out of every 12 diamonds in the world is processed in India, then nine out these take shape in Surat.

"In the short term, Surat may benefit only indirectly from this move as it is a manufacturing centre and Mumbai is India's trading hub. But in the long run, the future looks bright for Surat," says an upbeat Gujarat Hira Bourse president Chandrakant Sanghavi.

Of course, much of Surat's realizing this ambition hinges on its ability to grab from Mumbai its coveted status as the country's diamond trading and exports hub, as most Surat companies prefer to operate their marketing and exporting offices from Mumbai.

An attempt at this is already underway with the upcoming Ichhapore Gems & Jewellery SEZ. "If Surat can create world class infrastructure like international connectivity, luxury hotels and entertainment, it can unseat a frightfully expensive Mumbai as most of the players would prefer to expand at a cheaper destination. But till such time, international buyers, domestic players would still prefer to trade at Mumbai," adds Sanghavi.

"If Surat can upscale infrastructure, it can easily take away at least 30% of Mumbai's business," says Gitanjali group chairman Mehul Chokshi. So what does this scrapping of customs duty mean for India's diamond industry? The move directly benefits diamond jewellery manufacturers who can now value-add with imports of special cuts or varieties from other global centres. For Indian diamond traders and exporters, the removal of customs duty, which stood at 5% before the budget when Union finance minister slashed it to 3%, will now enable them to stock all varieties of diamonds right here in India.

"From just a global diamond manufacturing, India will now become a global trading hub at par with other major centres. Trading volumes will shoot up and exports will get a boost," points out Gems & Jewellery Export Promotion Council chairman Sanjay Kothari.

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