Rough trade
India should give incentives to the diamond industry and forget any ideas about taxing the sector
India is one of the biggest diamond polishing and processing countries in the world. That status may be under threat from an expected source: China.
The main source of rough diamonds for India are traditional suppliers in Belgium and elsewhere who get their supplies from Africa and Russia. China has now begun sourcing diamonds from miners in these countries. Its output of polished diamonds has increased dramatically in the past five years. The difficulties of Indian processors have increased and many of them have been forced to lay off workers.
What should India do? For starters, it should give incentives to the industry and forget any ideas about taxing the sector, a favourite demand of those who habitually quote the revenue foregone statement from the national budget every year. So far, Indians have stood their ground because of superior skills and trust in these markets. Some simplification of law will also help.
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