Restoration of Diamond Imprest Licence Announced by Piyush Goyal for Gems Sector

Commerce and Industry Minister Piyush Goyal announced the reintroduction of the Diamond Imprest Licence on Saturday. This licence allows for import duty exemption on cut and polished diamonds up to a specified limit. The announcement was made during the India International Jewellery Show IIJS 2024, organised by the Gem and Jewellery Export Promotion Council (GJEPC).

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The Diamond Imprest Licence permits eligible exporters to import cut and polished diamonds, including semi-processed, half-cut, and broken diamonds. Exporters can import diamonds up to 5% of their average turnover from the past three years, with a requirement to add 10% value. These imports must be used by the importer and cannot be transferred, even after exports are completed.

Impact on India's Diamond Exports

The absence of this licence had led to cut and polished diamonds being imported into Dubai, assorted there, and then re-exported. This process negatively impacted India's exports and jobs in the sector. The restoration of this licence aims to address these issues by allowing duty-free imports.

Ajay Srivastava, founder of GTRI, explained that some countries like South Africa, Namibia, and Tanzania require rough diamonds to be cut or processed before export. When these diamonds are imported into India, they are classified as cut and polished diamonds and face a 5% Basic Customs Duty. This makes India's diamond exports less competitive compared to countries like China, Vietnam, and Sri Lanka. "Now this licence will help import duty free," Srivastava said.

Historical Context

This licence was previously included in the foreign trade policy of 2002 and 2009. Its reintroduction is expected to boost the gems and jewellery sector by making Indian exports more competitive on the global stage.

In addition to the Diamond Imprest Licence, Goyal highlighted recent Budget announcements that include significant cuts in gold and silver import duties. He stated that these measures would help push the growth of the jewellery sector. "Gold will increasingly come through official channels and our workforce will get job orders," he said.

Training Initiatives

Goyal also mentioned that a Common Facility Centre for the sector at a special economic zone will train 1,500 special youngsters every year. These trainees will receive placements from over 10,000 members of GJEPC. Currently, the centre is training 300 physically challenged youths, including women.

The minister urged gem and jewellery exporters to remain positive despite global recession impacts on exports. He noted that India's domestic market is resilient and growing fast enough to compensate for export losses.

The reintroduction of the Diamond Imprest Licence is seen as a significant step towards revitalising India's diamond export industry. By allowing duty-free imports of cut and polished diamonds, it aims to make Indian exports more competitive globally while supporting domestic employment in the sector.