India’s diamond industry has praised the budget measures announced today by Finance Minister Nirmala Sitharaman. The new policies are expected to boost the sector by encouraging direct diamond sales from foreign mining companies and reducing taxes on key raw materials.
In her budget speech, Sitharaman introduced a set of changes aimed at supporting the diamond industry. One of the key measures is the introduction of safe harbor rates. These rates will provide fixed and favorable tax conditions for the purchase of rough diamonds in the country’s Special Notified Zones (SNZs). This move is designed to streamline the taxation process and protect foreign suppliers from unexpected tax liabilities.
In addition to the safe harbor rates, Sitharaman announced significant tax cuts on precious metals. The tax on gold and silver will be reduced from 15% and 10% to 6%, respectively. The tax on platinum will also drop from 12.5% to 6.4%. Moreover, diamond sales will be exempt from the 2% equalization levy, a measure aimed at promoting sustainability.
Sitharaman emphasized India’s global leadership in the diamond cutting and polishing industry, which provides employment to many skilled workers. “To further promote the development of this sector, we would provide for safe harbor rates for foreign mining companies selling raw diamonds in the country,” she said.
Vipul Shah, Chairman of the Gem and Jewellery Export Promotion Council (GJEPC), expressed strong support for the new measures. “I want to applaud and congratulate the Central Government for their three-point game-changing decisions for the gems and jewellery industry,” Shah said. He highlighted that the reductions in customs duties on gold and silver, the exemption of the diamond sector from the equalization levy, and the simplification of taxation rules for rough diamonds would help India maintain a leading position in the global gems and jewellery market.
The new budget measures are expected to strengthen India’s position as a major player in the international diamond industry and support its continued growth.
