India’s Polished Diamond Imports Slashed 80% in February

(IDEX Online News) – A sharp decline in India’s polished diamond trade in February after an import tax started to be collected. India exported $1.44 billion worth of polished diamonds in February, a 53.7 percent drop compared to February 2011.

The volume of exports sank 55 percent, based on provisional figures published by the Gem & Jewellery Export Promotion Council (GJEPC).

Despite the strong drop in exports, the average value of exports increased, rising 2.9 percent to $477.46 per carat.

In January, the Indian government started to tax polished diamond imports at 2 percent. The tax was added as the government was reportedly trying to stop the practice of round-tripping – a series of exports and imports of the same goods for the purpose of receiving greater bank financing.

Taxing polished diamond imports has, at least partially, stopped round-tripping, leading to the sharp decline in exports.

Polished diamond imports sank 80 percent to just $476.2 million in February. The volume of imports, 1.4 million carats, dropped 68.9 percent from the 4.5 million carats exported a year before.