The Government of India has confirmed that it supports the proposal of The Gem and Jewellery Export Promotion Council (GJEPC) for establishment of Special Notified Zone (SNZ) for import and trading of rough diamonds, while tabling a written reply in the Lok Sabha (Indian parliament) on Friday. However, no specific details were provided.

The statement issued by Minister of State (Independent Charge) in the Ministry of Commerce & Industry, Smt. Nirmala Sitharaman, noted that “The Special Notified Zone is being created with view to cut out middlemen and encourage overseas diamond mining companies to open their offices in India at designated zones to sell their produce directly to Indian manufacturers”.

It further added that “...establishment of Special Notified Zone will give the Indian diamond industry a strong competitive advantage against other diamond trading centres of the world like Antwerp, Dubai, etc., by saving time as well as foreign exchange spent on travel to these trading centres or establish offices there.  It will also ensure steady supply of rough diamonds in the country”.

The reply said that the formation of such a zone had also been suggested by the Task Group for Diamond Sector in January 2013 which was constituted to suggest measures to increase and promote the diamond trade and to make India an International Trading Hub for Rough Diamonds. The Task Group had made fifteen recommendations, out of which five recommendations related to tax, which also includes establishment of Special Notified Zone where taxes are paid only on invoices raised to Indian companies.