NEW DELHI: India’s gems and jewelry industry has finally received the government’s approval to establish a Special Notified Zone (SNZ) at the Bharat Diamond Bourse (BDB) in Mumbai for rough diamond imports, re-exporting and trading. Industry experts believe that this move will go a long way to strengthen India’s position as a leader in manufacturing of polished diamonds.
Aptly summing up what the development means for the industry, an industry veteran said on condition of anonymity, “The SNZ definitely comes as a big relief to the diamond manufacturers and the diamond industry, which faced a lot of regulation over rough imports and re-exporting unused or unsold consignments. As such, it is good news for the manufacturers.”
Reiterating this view, Sanjay Shah, the director of Gold Star Diamond Pvt. Ltd. added, “This is a positive move. It will help India to be a rough trading center, especially when we have more direct imports coming from various mines.”
A circular published by the government of India stated that it will permit the trading of rough diamonds from leading diamond mining companies at the SNZ. To facilitate this, the department of Commerce and the Gem & Jewellery Export Promotion Council (GJEPC) sought a regulatory framework under the Customs Act.
After consultations with other regulators, which included Directorate General of Foreign Trade (DGFT), Reserve Bank of India (RBI) and with industry groups such as the BDB and GJEPC, necessary provisions were created to allow and facilitate viewing, auctions and sales of rough diamonds at the BDB beginning July 1.
The SNZ, as denfined by the BDB, shall house facilities for the receipt, storing and viewing of imported rough, in addition to auctions and sales. It shall include all necessary commercial, security and customs related facilities incidental to these activities. To ensure transparency in the deals and also keeping in mind safety issues, the BDB is required to submit the floor plan, proposed facilities, including security related features, for approval to the Commissioner of Customs.
Earlier, all the diamond manufacturers in India used to travel to China, Antwerp, Israel, the UAE etc., to secure rough diamonds as the goods weren’t allowed to come directly to India. During the World Diamond Conference that was held in New Delhi in December 2014, Prime Minister Narendra Modi assured the participants of establishing the SNZ, keeping in line with the “Make in India” project, where India is being projected as a manufacturing hub. So far, 21 companies were given approval by RBI to participate in consigning rough diamonds at the SNZ. According to the circular, the importing of rough diamonds will be permitted through air cargo only. No imports through hand-carriage or express courier services will be permitted. Among other things, the rough diamonds being imported will need to be certified by the Kimberley Process.
GJEPC and the BDB will establish the India Diamond Trading Centre company, which will be entrusted to log and monitor the carat weight with the import invoice, packing list and Kimberley Process certificate. Thereafter, the parcel will be sealed and transferred to the strong room at the SNZ. The SNZ will be accessible to traders for viewing goods and any auctions and/or sales that take place. The GJEPC shall define the eligibility conditions for visitors, as guided by Customs rules. All persons permitted to visit the SNZ shall be issued a photo identity card by India Diamond Trading Centre.
According to the circular, the sale of rough diamonds from the SNZ shall be of a single or multiple lots but no sale of a sub-lot will be allowed. During the viewing/sale process, mixing of lots will not be permitted.
BDB and the India Diamond Trading Centre shall be responsible for the receipt, sales, re-exports, custody, delivery and accounting of the rough diamonds as prescribed by the jurisdictional Commissioner of Customs.
