Diamond jewellery makers welcome customs duty cuts

MUMBAI (Reuters) - Diamond jewellery makers welcomed customs duty cuts on polished diamonds and rough synthetic stones, as it helped promote India as a trading hub for polished diamonds. Finance Minister, P Chidambaram in his budget speech cut customs duty on polished diamonds to 3 percent from 5 percent and on rough synthetic stones to 5 percent from 12.5 percent.

"Ideally it should have been brought down to zero if you want to become a polished diamond trading centre," Neelesh Hundekari, principal of AT Kearney said. Mehul Choksi, chairman of Gitanjali Gems Ltd., welcomed the duty cuts but added the cuts would primarily benefit the domestic industry, not the export market.

"There are constraints on the natural diamond supply...you need to ease that pressure a little bit," Hundekari said about the duty cut on synthetic stones, "it would bridge that gap in the polishing industry and employment will grow."

"Clearly the Indian government wants to grow the industry and create employment, which this industry is capable of doing," said Chairman Jatin Mehta of Su-Raj Diamonds and Jewellery Ltd.