SNZ to help India compete against top diamond trading centres
Sachin Manawaria | The Dollar Business India’s Ministry of Commerce has said that it is establishing a Special Notified Zone (SNZ) for import and trading of rough diamonds that will facilitate international diamond mining companies to sell diamonds to Indian manufacturers directly. The SNZ will ensure a steady supply of rough diamonds, eliminate middlemen and provide the Indian diamond industry a competitive edge against other diamond trading centres such as Antwerp in Belgium, Israel and Dubai. The follows a proposal by the Gem and Jewellery Export Promotion Council (GJEPC) and a study released in January 2013. The Task Group for Diamond Sector had said that a SNZ is required to make India an international trading hub for rough diamonds. The Task Group had also recommended that all transactions in the SNZ be checked and verified by Customs by carats and not by value, and free import and export be allowed from the SNZ under Customs Bond. India’s diamond exports have recovered to around $26.1 billion in FY2013-14 (up 12% y/y), after declining around 17% y/y in FY2012-13. India imports of diamonds stands at around $22.3 billion. However, India’s diamond trade can get a boost with the SNZ and also after the visit of Vladimir V. Putin, President of the Russian Federation, to India on December 10-11, 2014, for the 15th Annual India-Russia Summit. President Putin will also inaugurate the World Diamond Conference being held in New Delhi during the visit. Russia is a top producer of rough diamonds by volume and the ALROSA group in Russia claims that it has the largest rough diamonds reserves in the world. According to GJEPC, Russia accounts for around 25% of total rough diamond produced in carat terms, and 26% by value. However, India imports around 90% of its rough diamonds from trading centres in EU, Israel and UAE, and Russia exports around 63% of its rough diamonds to EU and only 16% to India, according to GJEPC. GJEPC says that the signing of the planned MoU between the India and ALROSA will help improve diamond trade between the two countries. Negotiations are also on over a Free Trade Agreement (FTA) for the diamond sector between the two countries, GJEPC adds.
This article was published on December 6, 2014.