De Beers Has No Plans to Open India Trading Office

Luxembourg based De Beers, the global diamond mining company, says it has no plan to open a trading office in India as auction sales customers in India are serviced out of either Dubai or Antwerp.

India’s Gems and Jewellery Export Promotion Council (GJEPC) had been pressing the central government to declare a large office at the Bharat Diamond Bourse in the Bandra Kurla Complex of this city as a ‘Special Notified Zone’, to enable global miners such as De Beers to bring rough diamonds tax-free for auctioning in India.

Currently, small diamond processors travel to Dubai, Belgium and Antwerp for inspection of rough diamond lots and again for participating in auctions.

At the recent ‘Make in India’ meeting of business people and policy makers with Prime Minister Narendra Modi, GJEPC urged the government to introduce a conducive taxation regime, at par with other global gem and jewellery hubs such as Belgium, Israel, UAE, Thailand and China.

The industry wants the government to introduce a Benign Assessment Procedure for the diamond industry and to reduce the tax rate from the existing six per cent to 2.5 per cent, in addition to a reduction in import duty on cut and polished coloured gemstones from 2.5 per cent to nil.

Goods sold in a special notified zone come in the form of consignments. In transporting unsold quantities back to Dubai, Antwerp or London, the value of goods is added to the turnover, on which income tax is levied. Therefore, global rough diamond miners have been apprehensive on opening offices in India.

Major global trading centres such as Dubai, Singapore and Belgium have already extended such a facility. De Beers contributes around 25 per cent of India’s rough diamond supply. Well over 90 per cent of all rough diamonds mined in the world are processed in this country. Rough diamond import into India was estimated at $11,878 million in April–November, the first seven months of this financial year, compared with $16,716 mn in the corresponding period last year, 8.5 per cent higher.