Government Restores Diamond Imprest Licence for Gems and Jewellery Sector

Commerce and Industry Minister Piyush Goyal has announced the restoration of the Diamond Imprest Licence, a move aimed at revitalizing India’s gems and jewellery sector. The decision was made during the India International Jewellery Show (IIJS) 2024, organized by the Gem and Jewellery Export Promotion Council (GJEPC). This policy shift is expected to address issues related to diamond imports and enhance India’s export competitiveness.

Details of the Diamond Imprest Licence

Purpose and Benefits: The licence allows eligible exporters to import cut and polished diamonds, including semi-processed, half-cut, and broken diamonds, duty-free up to 5% of their average turnover from the past three years. Exporters are required to add 10% value to these imports, which must be used by the importer and cannot be transferred even after export.

Impact on Sector: The absence of this licence had led to the import of cut and polished diamonds into Dubai for sorting and re-exporting, adversely affecting India’s exports and employment in the sector.

Background and Justification

Previous Policy: The Diamond Imprest Licence was part of the foreign trade policy in 2002 and 2009.

Global Competitiveness: Countries like South Africa, Namibia, and Tanzania require diamonds to be cut or processed before export. Without the licence, Indian diamond exports faced a 5% Basic Customs Duty, making them less competitive compared to nations like China, Vietnam, and Sri Lanka.

Additional Measures and Announcements

Budget Impact: The recent budget cuts in gold and silver import duties are expected to bolster the jewellery sector, encouraging official gold imports and supporting job creation.

Training and Employment: A Common Facility Centre at a special economic zone will train 1,500 youths annually, with placement opportunities from over 10,000 GJEPC members. Currently, the centre is training 300 physically challenged youths, including women.

Minister’s Remarks

Goyal emphasized the resilience of India’s domestic market and urged exporters to remain optimistic despite global economic challenges.