Indian Government plans hallmarking of diamonds

http://www.moneyspidery.com/2012/01/30/indian-government-plans-hallmarking-of-diamonds/

India is planning to soon have a hallmarking mechanism for diamonds. Sources said that the government is thinking of certification of diamond like that for gold.

The trigger for the move comes in the form of a recent circular by the customs department imposing an import duty of 2 per cent on both lab-grown diamonds and natural diamonds.

With this, experts fear the country might see a big inflow of lab-grown diamonds, which hitherto had an import duty of 10 per cent. It also raises concern that consumers, finding it hard to tell the difference between lab-grown and natural diamonds, could be duped. Natural diamonds will now attract a duty of 2 per cent as per the notification by the finance ministry.

Given the fact that lab grown diamonds cost 40-50 per cent less than the natural ones, it is the jewellers who are going to benefit the most, the experts say.

“It is not good for customers. There must be some certification like the one for gold. In fact, it should have a separate duty structure and tariff code. India’s strength lies in natural diamonds and we have no competence in lab-grown diamonds,” an official of gems and jewellery export promotion council (GJEPC) said.

The official said that the government should first put infrastructure in form of laboratories for industrial diamonds as currently there is no facility for testing the lab diamonds, which are also used for making jewellery

It is to be noted that the US is a major manufacturer of lab diamonds in the world.

According to provisional data from GJEPC, during April-December period, import of rough diamond stood at $11.21 billion while that of cut-and-polished diamond stood at $12.05 billion.