Govt to reconcile diamond import data
The commerce ministry has called a meeting on March 8 after two of its agencies provided different sets of data on imports of cut and polished diamonds.
Data by Directorate General of Commercial Intelligence and Statistics (DGCI&S) showed imports of cut and polished diamonds in April-November 2017 stood at $6.3 billion. On the other hand, data provided by the Gems and Jewellery Export Promotion Council (GJEPC) pegged the number at $1.5 billion.
India traditionally exports polished diamonds, therefore, the DGCI&S data is a cause for concern.
The GJEPC said of the total polished diamonds imports, goods worth $4.9 billion remained unsold. Hence, it cannot be considered as an increase in imports.
Last year, there was no discrepancy in the two sets of data.
DGCI&S compiles data for all commodities, while the GJEPC focuses on the promotion of exports of gems and jewellery.
“The total figure of $6.3 billion quoted comprises two distinct categories – actual imports and return consignments. Both terms are officially used in trade parlance and by the Customs department,” a GJEPC spokesperson said.
According to the spokesperson, the majority of diamonds exports are on consignment basis, which means if goods sent for exhibition are bought, they are treated as exports; else, they are brought back.
Return consignments comprise gems and jewellery sent abroad for exhibition, export promotion or brand promotion purposes and for certification by international laboratories. No monetary transaction is involved in these consignments.
According to the GJEPC, return consignments in AprilNovember 2017 stood at $4.94 billion, against $4.97 billion in the corresponding period a year earlier.
The GJEPC said “consignment imports cannot be termed as imports” as they are only “certified exports” for reimport. These are goods that are sent out of the country, but might come back if unsold or are meant to come back in case of certification.
“No import duty is levied due to the same reason,” the council added.
Industry insiders doubt the authenticity of the return consignment data as the diamond industry is rife with havala trade, money laundering and round-tripping, which means exported goods are brought back but are shown as imports.
Till 2012, money laundering *Cut & polished diamond figures taken by HS Code 71023910 from DGCI&S Compiled by BS Research Bureau was rampant in the diamond industry. After the government imposed a 2.5 per cent import duty on polished diamonds, instances of laundering have decreased. Round-tripping is expected to end with the Budget proposing to double the import duty on polished diamonds to 5 per cent.