According to data available from the Gem and Jewellery Export Promotion Council (GJEPC), the US accounted for nearly half of the total of India's export of cut and polished diamonds valued at nearly US $24 billion.
Indian exports of cut and polished diamonds to the United States would be costlier by around 7-8 per cent following the withdrawal of GSP benefits, according to rating agency CRISIL.
The withdrawal of GSP benefits to India adds to the woes of diamond exporters, who are reeling under reduced credit facilities from financial institutions following the frauds carried out by diamond merchants Mehul Choksi and Nirav Modi, according to those in the trade. Sources at the GJEPC say that the American government's decision to remove all distinction between natural and man-made diamonds has also affected the exports of cut and polished diamonds.
Those in the trade say that the US has been progressively raising tariffs against Indian exports of gem and jewellery, with the result that suppliers from the sub-continent were rendered noncompetitive in that market. Withdrawal of GSP benefits on some items of jewellery from 2007 to 2009 caused their exports to fall by nearly 25 per cent over a ten-year period, according to GJEPC officials.
Exports of cut and polished diamonds are now demanding that the Indian government grant them a 4 per cent subsidy under the Merchandise Exports from India Scheme (MEIS) in the forthcoming budget in order to offset the higher tariffs following withdrawal of GSP benefits by the USA.
Courtesy: Tribune India
