EXIM Management in Indian Diamond Industry

Introduction
Diamond production in India can be traced back to almost 8th century B C. Indian diamond industry is mainly involved in cutting, polishing and exporting diamonds. India produces about 33000 carats of rough diamonds, the cut & polished diamonds produced by India account for 70% of

1104 mn. carats of world cut & polished natural diamonds, i.e.
800 million carats of cut & polished diamonds..

 Out of every batch of 10 diamonds made in the world, 7.5 are made in India. It shows that India has established itself as the worlds largest diamond processing center.

This clearly shows that Diamond polishing industry

in India is very significant.

About the imports

Rough imports grew 44 percent to $1.41 billion during the month with volume declining by 32 percent to 10.629 million carats. The average price on the rough imports more than doubled to $132.97 per carat. During the first five months of 2011, Indias Rough imports rose 27 percent to $6 billion and rough exports grew 65

percent to $620.3 million.

Net rough imports increased by 24 percent to $5.39 billion

Net import

About exports
Indias polished diamond exports rose 24 percent year on year to $2.22 billion in May 2011. By volume, polished exports grew 18 percent to 5.042 million carats as the average price of the diamonds increased 5 percent to $440.68 per carat. During the first five months of 2011, Indias polished exports rose 36 percent to $13.44 billion

Net polished exports declined by 30 percent to $2.43 billion.

Net exports of diamonds

Rough diamonds

EXIM Policy
Duty Free Import Entitlement (based on FOB value of exports during previous financial year) of Consumables and Tools, for: 1) Jewellery made out of: (a) Precious metals (other than Gold &Platinum) 2% (b)Gold and Platinum 1% (c )Rhodium finished Silver 3% 2) Cut and Polished Diamonds 1% Import of Diamonds on consignment basis for Certification/ Grading & re-

export by the authorized offices/agencies of Gemological Institute of America

(GIA) in India or other approved agencies will be permitted. In an Endeavour to make India a diamond international trading hub, it is

planned to establish Diamond Bourse (s).

Letter of Credit(L/C)
Import of diamonds into India should be accompanied by Kimberley Process Certificate (KPC). Similarly, exports from India should also be accompanied by the KPC to the effect that no conflict/ rough diamonds have been used in the process. The KPCs would be verified/ validated in

the case of imports/ exports by the Gem and Jewellery Export Promotion
Council. Reserve Bank of India (RBI) has reduced the term of letter of credit (L/C) from one year to just 90 days for the import of rough and polished diamonds.

Revenue generated
Surat is India's diamond processing hub, contributing over 80 per cent of the country's diamond processing industry with annual revenue of around US$ 13.03

billion.
The diamond jewellery industry grew 30 per cent in calendar year 2011, as consumers are attracted towards using items as both luxury fashion and investment.

Indias share of diamond processing

Today India is the largest diamond cutting and polishing center in the world, it enjoys 60% value share for diamond cutting and polishing. 85% volume share and 92% share of the world market in terms of number of pieces. The country is also the third largest consumer of polished diamonds

Conclusion
The global economic crisis seems to have acted as something of a refining fire for the Indian diamond industry, which today sees itself further ahead of the competition than it has ever been. The industry should push harder to ensure that its product gets to more markets around the world if it wants to sustain value

growth.