India Targets Diamond & Gem 'Round-Tripping

The Government of India is launching a crackdown on the trade of precious gems and precious metals at its Special Economic Zones in order to weed out corruption, Rough and Polished reports. India's Department of Commerce claims that while the zones exist in order to permit Indian firms to import goods related to the manufacture of jewelry, add value to them, and then re-export them, some companies have actually been taking advantage of the zone's relaxed rules to import valuable gems and metals and then re-sell them directly to their own domestic market.

Firms that have been importing gold, pearls and diamonds in this way have pocketed an extra 11.5% -- 10% customs duty plus 1.5% excise duty –and have saved themselves the 2% import duty on diamonds, as well. In an effort to stymie these business practices, the Commerce Department intends to stipulate new rules which would specify the amount of value that a firm must add if it wishes to operate at the zones, according to Rough and Polished.

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