Exports of cut and polished diamonds saw a sharp fall in February, mainly due to the imposition of two per cent duty on imports leading to a decline in round-tripping, industry officials said.
The country's exports of cut and polished diamonds during February declined by 50 per cent in rupee terms to Rs 7,093.24 crore, according to data on the Gem and Jewellery Export Promotion Council (GJEPC) Web site.
“The imposition of two per cent duty on imports of polished diamonds has led to a decline in exports,” Mr Sanjay Kothari, Vice-Chairman, GJEPC, said.
In January, the Government had imposed a two per cent Customs duty on imports of cut and polished diamonds to control round-tripping or repeated export and import of the same diamonds.
After the duty hike in January, the imports of cut and polished diamonds moved down by 78 per cent in February alone and 21 per cent during the cumulative 11-month period. Imports of cut and polished diamonds fell to Rs 63,341.4 crore from Rs 79,775.6 crore in the same period last year.
Gold jewellery
Exports of gold jewellery also moved down by 25 per cent during February in rupee terms to Rs 2,349.50 crore. The reason for the fall in exports, according to Mr Kothari, is the hike in duty on imports of gold.
India's exports of cut and polished diamonds for April 2011 to February 2012 also dipped by 9.5 per cent to Rs 1,00,134.3 crore.
Exports of cut and polished diamonds have been on a declining trend due to slack demand in the US. Also, the tariff measure to check round-tripping has lowered exports.
Gold jewellery exports for the cumulative period until February were up 31 per cent at Rs 38,504.56 crore, the data showed.
Exports of gold jewellery have been growing consistently but the recent duty hikes — the first in January and the second in the Union Budget — may impact overseas sales to some extent, industry officials said.
The country's total gem and jewellery exports in the April 2011-February 2012 period were up 8.3 per cent, at Rs 1,81,878.50 crore.
Coloured gemstones
Exports of coloured gemstones continued to register strong growth. During the cumulative period of 11 months, overseas sales rose by 20 per cent to Rs 1,486.26 crore.
Silver jewellery exports also kept up the momentum, with overseas sales during the 11-month period growing by 42 per cent to Rs 3,119.56 crore.