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Rapaport to India: Scrap Diamond Import Tax

Mar 20, 2017 2:03 PM   By Rapaport News
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RAPAPORT... Martin Rapaport, chairman of the Rapaport Group, called on India to show reciprocity in its trade relationship with the United States.

“America is and will be India’s most important market,” Rapaport said on Monday at the “Mines to Market” conference, marking 50 years of India’s Gem & Jewellery Export Promotion Council. “American demand will grow significantly due to new economic policies, and the U.S. government will insist on a level playing field,” he added, citing President Donald Trump’s policy of leveraging American power to rebalance what he considers to be unfair trade ties with large export nations such as China.

The U.S. imported $3.8 billion worth of diamonds more from India than it exported to the country in 2015, making India a net beneficiary in the partnership. Yet India does not reciprocate by offering competitive import tax rates, Rapaport argued. India’s import tax on loose polished diamonds and gems is 2.575 percent, whereas the U.S. charges nothing. In addition, India’s levy on diamond-jewelry imports is 31.56 percent, compared with America’s 5.5 percent.

“We’re calling for a U.S.-India bilateral trade agreement with zero import taxes for diamonds, gems and jewelry,” he added. “Reciprocity means equal import taxes at U.S. and Indian borders, or – even better – zero percent at both.”

Rapaport also called on the Indian diamond trade to sharpen its focus on transparency and traceability of supply, saying that “markets will be identified and segmented based on the sourcing legitimacy of people, products and money.”

Moves by retailers such as Signet Jewelers to ensure they source diamonds from approved suppliers indicate a market shift toward responsible sourcing, which, he cautioned, traders must be aware of.

“You must be responsible for what you buy and sell,” Rapaport said. “If you can tell your wife and the tax authorities everything you are doing in business, you’re okay.”

Meanwhile, Rapaport questioned the practices of the Kimberley Process and raised suspicion about why rough diamonds are leaving the United Arab Emirates at a significantly higher value than when they enter the country. The 40-percent increase in price “sticks out like a sore thumb,” he said.
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Tags: diamonds, Donald Trump, GJEPC, Jewelry, Martin Rapaport, Narendra Modi, Rapaport, Rapaport News
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