SURAT (Commodity Online): Following the arrest of 21 diamond traders from India, mainly from Surat, the Gems & Jewellery Export Promotion Council (GJEPC) is mulling to pull out of the diamond cutting and polishing business in China.
China had nabbed 21 Indian diamond merchants for alleged smuggling of diamonds from Hong Kong to China. External affairs ministry officials said the ministry will help the traders legally.
Diamond imports into China come with a 4 per cent duty for members of the Shanghai Diamond Exchange and 18 per cent for non-members. Diamond imports into Hong Kong do not attract any duty. As such, it is attractive for any diamond merchant to export precious stones to Hong Kong. Shenzen, is about an hour away from Hong Kong.
Reports state that 50 per cent of India's total diamond exports to China were conducted by illegal methods through Hong Kong, in an effort to save on tax and be competitive. The council also mentioned that it would not object provided the Chinese government allows the local judiciary to tackle the matter.
Meanwhile, the consumer price index for jewellery in the US held to its highest level since June 1995 during the month of December 2009. The December reading of 161.25 points was 2.6 per cent higher than the level achieved in December 2008. For the full year of 2009, the average reading was 157 points, up from 153.79 points in 2008.