With high expectations from the Narendra Modi government’s first Budget, a delegation of diamantaires and representatives of the Gems and Jewellery Export Promotion Council (GJEPC), Surat Diamond Association (SDA) and MP Darshana Jarosh on Tuesday met Union Finance Minister Arun Jaitley, demanding relaxation in various rules relating to gems and jewellery industry.

However, the Finance Minister remained reluctant to give any assurance on revisiting the much-troubled gold import’s 80:20 rule, which allows only the nominated agencies to import gold on the condition that 20 per cent of the imported shipment will be exported.

“The Finance Minister didn’t give any assurance to look into the gold import issue. According to him, any change in that would create adverse impact on the rupee,” Vipul Shah, Chairman, GJEPC, told BusinessLine . According to a section of traders, the rule has adversely affected gold availability, resulting in smuggling.

But the Finance Minister assured to address other pressing demands.

“The burning issue for the diamond traders is the suppliers’ credit cycle, which was earlier 180 days and reduced to 90 days in 2011. We have demanded to restore the credit cycle back to 180 days,” Shah said.

The delegation demanded setting up of a special notified zone for the diamond industry, aimed at facilitating the local traders to source rough diamonds directly from mining companies from their offices in the zone.

Many diamond mining companies including De-Beers, Rio Tinto, Alrosa are already lining up to start their offices in India. “But India’s complex tax structure is a deterrent. If mining companies open their offices here, traders will easily get their raw material. Already 8-10 companies have lined up,” said Shah.

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