Indian Trade scenario in cut and polished Diamond

sector


Sohini Roy (48A)
Sanjeev Kumar (42A)
Pratik Godhane (35A)

Indian Institute of Foreign Trade



2

CONTENTS
Content table 2
1. Diamond Industry
a. Overview 3
b. Value chain: Value additions at different stages 3
c. Demand-Supply comparisons 6
d. Major Importer and exporter countries 8
e. Major players: 9
2. Indian Industry
a. Overview 10
b. Regulating Bodies: 11
c. SWOT: Indian Diamond Industry 11
3. Policies on Diamond Trade in India
a. Trade policies 12
b. FDI Policy 14
c. Diamond Dollar Account 14
d. Documentation 15
4. Volatility in Diamond trade 16
5. Past Trend in Diamond trade in India
a. Statistical background 17
b. Recent decline(analysis) 19
6. ISSUES AND CHALLENGES
a. Issues Under BAP 21
b. Tax challenges 21
c. Other Risks 22
7. Export Strategy for Dubai: Related recommendations
a. Growth potential: World 23
b. Major Export Destination : UAE Strategy 25
c. Recommendation 26
a. Tax Related 27
b. Procedures related 29
c. Other Recommendation 29

APPENDIX 31

3

"INDIAN TRADE SCENARIO IN CUT AND POLISHED DIAMOND SECTOR
1. DIAMOND INDUSTRY
Overview
Diamond comes from the Greek adamao, transliterated as adamao, I tame, I subdue. The
adjective adamas was used to describe the hardest substance known, and eventually became
synonymous with diamond. Knowledge of diamond and the origin of its many connotations start
in India, where it was first mined. The word most generally used for diamond in Sanskrit is
transliterated as vajra. The earliest known reference to diamond is a Sanskrit manuscript, the
Arthsasastra by Kautiliya. The Ratnapariksa for Buddha Bhatta is a 6th century treatise on gems.
The manuscript summarizes Indias knowledge about diamond. For 1,000 years, starting in
roughly the 4th century BC, India was the only source of diamonds. World famous diamonds such
as Koh-L-noor, the orlof, The great Mogul, Sancy Hope, Floretine, Nassak, regent, Pitli, Nizam etc
were the products of India. In 1725, important sources were discovered in Brazil, and in the 1870s
major finds in South Africa marked a dramatic increase in the diamond supply. Additional major
producers now include Russia, Canada, Botswana, Australia, DR Congo, Ghana etc. Today
diamonds are mined in more than 25 countries. Geological processes create two basic types of
diamond deposits, referred to as primary and secondary sources. Primary sources are the
Kimberlites and lamproite pipes that raise diamonds from Earths mantle, where they originate.
Secondary sources, created by erosion, include such deposits as surface scatterings around a pipe,
concentrations in river channels and fluxes from rivers moved by wave action along ocean coats,
past and present. The use of diamonds as gemstones of decorative value is the most familiar use to
most people today. Since around 1900, experts in the field of gemology have developed methods
of characterizing diamonds and other gemstones based on the characteristics most important to
their value as gem. Diamonds are one of the worlds major resourcesand historically one of the
least understood. For many years observers and even many participants have considered the
diamond industry to be complex and difficult to comprehend, even impenetrable. Major changes
over the past 50 years have transformed the diamond industry. New diamond supplies have
emerged, and mining and production have expanded beyond southern Africa to Russia, Australia
and Canada. Commercial production of diamonds started in South Africa in 1870 and had
expanded to four continents by the early 2000s, with 133 million carats produced in 2010 (see
Figure 7). Today most commercially viable deposits are found in Australia, Botswana, Canada,
Russia and South Africa. Russia produces nearly one quarter of global diamond output by volume,
followed closely by Botswana.
Value chain: Value additions at different stages
Eight stages define the value chain in the diamond industry, beginning with the exploration of a
potential diamond deposit and ending with the demand for diamonds by millions of consumers
around the world. Along the way many different playersminers, dealers, craftspeople,
jewellersface distinct market dynamics and economic challenges.

4

Exploration: In this stage producers seek commercially viable diamond resources, usually by
finding and evaluating kimberlite and lamproite pipes that might contain diamond ore. When a
promising site is located the producers develop and construct new mines.
Production: Getting the diamondiferous ore out of the ground usually occurs through open-pit or
underground mining. Alluvial and marine mining are two other methods of diamond production.
Once mined, the diamond ore passes through various processing stages to extract rough diamonds
from it. Next producers inspect, classify and prepare the diamonds for rough-diamond sales.
London, Moscow and Antwerp are the main centres for the purchase and trade of rough
diamonds. These primary sales most often take place within the sight-holder system, a system
specific to the diamond industry in which a select group of verified buyers are allowed to
purchase rough product. Other sales channels include auctions and spot sales.
Cutting and polishing: This stage, in which diamonds are transformed from rough stones into
finished gems, comprises five steps: determining the optimal cut, cleaving or sawing to break the
rough diamond into pieces, bruiting to give the diamond the desired shape, polishing to cut the
facets and final inspection to ensure quality. Diamond cutting requires specialized knowledge,
tools and equipment. Thousands of small players populate this segment of the industry, mostly in
India and elsewhere in Asia. Governments are increasingly requiring diamond producers to keep
some profits closer to home by developing a local infrastructure and talent, with the result that
countries including Botswana are emerging as cutting and polishing centres.
Jewellery manufacturing: Manufacturers use both in-house and outside designers to create
their product, and the sector is quite fragmented. Thousands of players ranging from individual
shops to large companies such as Tiffany, Cartier and Chow Tai Fook are integrated into different
steps of the value chain, from rough diamond sales to jewellery design and manufacturing to
retail. A large share of the mid- to low-range jewellery manufacturing takes place in China and
India.
At either end of the value chain a handful of well-known public companies operate and earn the
industrys highest profits. In the middle of the chain diamonds pass through a complex and
fragmented distribution system in which many thousands of individuals and small businesses,
almost all privately owned, are bound together in an intricate web of relationships. These cutters,
polishers and manufacturers engage in a significant amount of back-and-forth trading.
The value of diamonds increases significantly as they travel through the pipeline from the mine to
the final market, nearly quintupling over the course of the journey. The greatest value$25
billion or more in both casesis added at the jewellery manufacturing and retail stages. Rough-
diamond production generates revenues of $14.8 billion. The revenues grow to $47.2 billion when
the diamonds are manufactured into jewellery and grow again to $72.1 billion when the jewellery
is sold at retail. Rough-diamond production remains the most attractive point on the value chain,
boasting profit margins of 1620%


5







Fig 1: Value chain additions and players in Industry










Fig 2: Price/Value increase in Value chain of Diamond

14.8 15.2 20.7 22.6
47.2
72.1
25.0
25.0
Sales In Bn $ at different stages
2.0
6.0
0.4
16-20% 1-8% 11-14%
<100 ~5000 >200,000
Increasing cost of mining and
exploration
Increasing beneficiation
requirement
Increasing cost competitiveness
in cutting and polishing
Access to rough diamonds
Securing supply of required
assortment
ALROSA, De Beers, Rio Tinto,
BHP Billion, Petra Diamonds,
Diamcor, Endiama
Pluczenilk, Cristall,
Diarough, Rosy Blue, Choi
Tai Fook, Dimexon, Spira
Tiffany & Co., Richemont,
LVMH, Signet and 250,000+
retailers
128 65-75 25
ROUGH DIAMONDS
Margin
No Of players
Key
challenges
POLISHED DIAMONDS DIAMOND JEWELRY
Explorat
ion and
producti
on
Explorat
ion and
producti
on
Cutting
and
polishin
g
Polished
Diamon
d sales
Jewelry
manufac
turing
Retail
Manufa
cturing
PRODUCTION
Major Players
120
200
900
Total Rough
Diamonds
Gem Quality
Rough
Diamonds
Polished
Diamonds
1.8 X
4.5 X
AVERAGE PRICE PER CARAT, in $ (INCREMENT
WITH DIFFERENT STAGES)

6

Demand-Supply comparisons
Demand supply gap is expected to increase further because of increase in demand especially
because of increase in demand from developing countries like India and China. Over the next
decade, a range of possible scenariosbased on macroeconomic trends and an increasing
appetite for diamond jewellery in key marketsindicates that demand for rough diamonds will
outpace supply. This imbalance translates into a positive outlook for diamond producers and
support for a potential long-term price increase.


Fig 3: Demand Supply Forecast for Diamond


Fig 4: Demand Comparison 2012 Vs 2020
0
50
100
150
200
250
300
2010 2012F 2014F 2016F 2018F 2020F
Demand
Supply
DEMAND SUPPLY FORECAST FOR DIAMOND
37%
14% 10%
10%
9%
7%
13% 33%
11%
7%
12%
12%
13%
12%
Demand Comaprison 2012(Inner) Vs
2020
US
EUROPE
JAPAN
REST OF ASIA
INDIA
CHINA
OTHERS

7


African countries account for most of the worlds diamond resources. The true level of Africas
reserves and resources may be even higher than indicated, because large sections of the continent
that potentially hold diamonds remain unexplored. The total level of diamond reserves has
remained fairly stable in recent years, at 2.3 billion carats, with total global production roughly
offsetting additional reserves. The approximate balance between additional reserves and annual
production implies strongly that the overall production landscape will not markedly change in the
near term. However, most new reserves are incremental and of relatively lower quality than
diamonds currently being extracted. The last major mine was discovered in Zimbabwe in 1997.

Fig 5: Major producers in the world

8


Fig 6: Annual production in the world
Major importers and exporters
India, United States of America, Belgium, Hong Kong, Israel, United Kingdom and China are the
major importers of either rough or polished diamonds. Import in China and India is expected to
increase further owing to growing middle class.

Fig 8: Major Importers in the world
India, United States of America, Belgium, Hong Kong, Israel, United Kingdom and UAE are the
major exporters of either rough or polished diamonds. Export from China and India is expected to
increase even further going ahead into the next decade.
2006 2007 2008 2009 2010 2011 2012
176
168
163
120
128
123
128
Annual Production
20882474
20252450
18865207
18357745
8927007
8225882 8120514
5757882
India United
States of
America
Belgium Hong Kong,
China
United Arab
Emirates
Israel United
Kingdom
China
Major Importers
Total Import in 2012-13 (In US$'000)

9


Fig 9: Major Exporters in the world

Major players
ALROSA: The predecessor of Russias largest diamond company was founded in 1957 in the
Union of Soviet Socialist Republics (USSR). In 1992 it was transformed into the joint stock
company ALROSA. Key shareholders are the Russian Federation government with 51 percent, the
state government of the Yakutia Republic (32 percent) and local municipalities (8 percent).
BHP Billiton: A global diversified natural resources company, BHP Billiton was founded in 1885.
The company owns 80 percent of the Ekati mine in Canada; in 2010, its share of diamond
production rom that mine totaled three million carats. Diamond sales constituted 2.4 percent of
total company revenues in 2010.
De Beers: Founded in 1888, De Beers grew into a family of interrelated companies in diamond
mining, trading and industrial diamond manufacturing. Key shareholders are Anglo American, the
Oppenheimer family, and the government of Botswana. Rough-diamond production in South
Africa, Namibia, Botswana and Canada makes up the core business. De Beers production in 2010
was 33 million carats.
Rio Tinto: Founded in 1873, Rio Tinto is a diversified UKAustralian mining and resources group
with headquarters in London and Melbourne. The company produces diamonds in Australia,
Canada and Zimbabwe.
India Belgium Israel United
States of
America
Hong
Kong,
China
United
Arab
Emirates
United
Kingdom
22353494
18076131
17470158
16988793
13485402
9696685
8733202
Major Exporters
Total Exports in 2012-13 (In US$ '000))

10



2. INDIAN INDUSTRY

Overview
The diamond jewellery industry occupies an important position in the Indian economy. It is a
leading foreign exchange earner, as well as one of the fastest growing industries in the country.
Diamonds account for 54% of the total gem and jewellery export basket of the industry and India
is worlds leading exporter of Cut and Polished Diamonds. A major contributor to the creditable
performance of the industry is the massive diamond manufacturing sector, which employs nearly
one million people across the country. The industry has grown from its small origins in the 50s
and has established itself as the worlds largest manufacturing centre of cut and polished
diamonds for the last many years, contributing 60% of the worlds supply in terms of value, 85%
in terms of volume and 92% in terms of pieces. Surat along with Navsari, Bhavnagar, Amreli are
known as the diamond manufacturing/processing hub whereas Mumbai is the diamond trading
hub. India is the world leader in diamonds both in quantity and value terms. This pre-eminent
position has been achieved through progressive liberalization of Government policies,
entrepreneurships and skilled labour. India has achieved global leadership position, in the
business of cutting and polishing diamonds also due to its price competitiveness and willingness
to work for low margins. 14 out of every 15 diamonds set in jewellery worldwide are processed in
India. India has already established itself as International Diamond Manufacturing Hub. Indian
diamantaires have gone on to create a marketing network worldwide. Added to this is the strong
financial base of the industry and support of financial institutions of the country.
India is the largest diamond cutting and polishing centre in the world - the Indian diamond cutting
and polishing industry enjoys 60 per cent value share, 85 per cent volume share and 92 per cent
share of the world market in terms of number of pieces. In other words, nearly 9 out of 10
diamonds sold worldwide are cut and polished in India.
0
20
40
60
80
100
120
140
160
180
1990 2000 2005 2006 2008 2010
Others
BHP Billiton
Rio Tinto
Alrosa
De Beers

11

Indian diamond jewellery industry is the third largest consumer of polished diamonds after USA
and Japan. Diamond jewellery consumption is likely to jump to nearly 80 per cent in 2010 and
over 95 per cent between 2010 and 2015.
Today, after creating a niche for itself in the diamond world with small diamonds, India is
developing skills for cutting and polishing larger stones and fancy cuts. Indian diamond polishing
factories are on par with the worlds best employing cutting edge of technology using laser
machine, computerized yield planning machines, advanced bruiting lathe, diamond impregnated
scaives etc.
Other successful Global Diamond Trading Centres like Belgium, Israel, China and Dubai realizing
this offer low and predictable taxation regimes for diamond business. This has meant that despite
Indias current dominance in manufacturing, it has failed to become a hub for rough diamonds,
thus increasing the transaction cost of our exporters in way of travel costs, cost of brokerage and
etc. Also small manufacturers suffer more as they do not have the reach and capability to deal with
suppliers of roughs in Hong Kong, Belgium, Dubai and etc, thus totally dependent on secondary
suppliers.
India processes about 92 percent of the world's diamonds, followed by Belgium, Israel and China.
Most of the diamonds are sourced from world miners through Dubai. India, the world's largest
processor of rough diamonds, gets most of its supply from firms such as top producer De Beers,
mining giant Rio Tinto, and Russian state-owned Alrosa.

Regulating Bodies:

The Gem and Jewellery Export Promotion Council (GJEPC): This is the apex body of the gem
and jewellery trade in India, which was set up in 1966 for promoting precious stones and
jewellery exportations. With strength of 6,500 members spread all over the country, the Council is
primarily involved in introducing the Indian gem & jewellery products to the international market
and promotes their exports.

The Gem and Jewellery Trade Council of India (GJTCI): This council is established with the
main aim of boosting the gem and jewellery trade of India. It plays an important role in
showcasing the Indian gem and jewellery to the international market.


SWOT : Indian Diamond Industry

12



3. POLICIES ON DIAMOND TRADE IN INDIA

Policies on diamond trade in India
1. Duty free Import Entitlement (based on FOB value of exports during previous financial
year) of Consumables and Tools, for Cut and Polished Diamonds is 1%.
2. Duty free import entitlement of commercial samples shall be Rs. 300,000.
3. Import of Diamonds on consignment basis for Certification/ Grading & re-export by the
authorized offices/agencies of Gemological Institute of America (GIA) in India or other
approved agencies will be permitted.
4. Extension in number of days for re-import of unsold items in case of participation in an
exhibition in USA Increased to 90 days.
5. An exporter with annual export turnover of about US$ 831.289 (Rs 50 million) for each of
the past three years may export cut and polished diamonds of 0.10 carat and larger to
Strengths:

- One million craftsman associated with it. their
skills can be harnessed for designing and
making modern jewellery.
- Abundance of cheap and skilled labor in India.
- Excellent marketing network spread across the
world.
- Supportive government industrial/ exim policy
Weaknesses:
- High domestic interest rates compared to
elsewhere
- Small firms lacking technological/ export
information expertise.
- Traditional Way of Crafting : Low productivity
compared to labor in china, Thailand and Shrilanka.
- As the major raw material requirements need to be
imported, companies normally stock huge quantities
of inventory resulting high inventory carrying costs.
Rough diamonds as raw material account for more
than 50 per cent of imports in gems and jewellery
sector.

Opportunities:
- New markets in Europe & Latin America
- Growing demand in south Asian & far east
countries.
- Removal gold control act.

Threats:
-Changing fashion: Global marketing requires a
changing fashion of gems and jewellery particularly
in the context of very high prices of diamond, gold
and silver
- China, Sri Lanka and Thailand's entry in small
diamond segment
- Infrastructural bottlenecks, frequent changes in
exim policies, irregular supply of gold.
- Over dependence on single-channel supply chain.
Decisions of De Beers and Argyle's terms for
renewing their supply contract.
- Anti Social Activities and Threat of Terrorism: Anti
social activities are increasing especially in major
cities like Delhi and Mumbai. Security has become
one of the major issues for the gems and jewellery
sector

SWOT

13

authorized laboratories with re-import facilities at zero duty within three months of the
date of export.
6. In an endeavour to make India a diamond international trading hub, it is planned to
establish Diamond Bourse
7. Import of rough diamond from Cote dIvoire shall be prohibited in compliance to
Paragraph 6 of UN Security Council Resolution (UNSCR)64(2005).
8. The import/export of rough diamond (HS Code 712010,710221, or 710231) from/to
Venezuela shall be prohibited in view of voluntary separation of Venezuela from the
Kimberley Process Certification Scheme (KPCS). No Kimberley Process Certificate shall be
accepted/endorsed/issued for import and export of rough diamonds from / to Venezuela.
9. Every exporter or importer shall comply with the provisions of FT (D&R) Act, the Rules and
Orders made there-under, FTP and terms and conditions of any Authorisation granted to
him. All imported goods shall also be subject to domestic Laws, Rules, Orders, Regulations,
technical specifications, environmental and safety norms as applicable to domestically
produced goods. No import or export of rough diamonds shall be permitted unless
accompanied by Kimberley Process (KP) Certificate as specified by Gem & Jewellery
EPC(GJEPC).
10. Diamond export product shall be e ineligible for Duty Credit Scrip, under FMS scheme.
11. Exporters of gems and Jewellery can import / procure duty free inputs for manufacturing.
12. Replenishment authorization: Exporters may obtain Replenishment (REP) Authorisations
from RA in accordance with procedure specified in HBP v1.
Replenishment authorisation may also be issued for consumables & tools as per paragraph
$A.28 of HBP v1.
13. Import of Diamonds for Certification/ Grading & re-export: The authorized
offices/agencies in India of Institute of America (GIA) or any other agency approved in this
regard, shall be permitted to import diamonds to their laboratories for the purpose of
certification/grading reports by them with a condition that the same should be re-exported
with the certification/grading reports issued by them without any import duty, as per the
procedure laid down in HBP v1.
14. Nominated Agencies: Nominated agencies are Diamond India Limited (DIL), Gems &
Jewellery Export Promotion Council (G&J EPC)), Star Trading House (only for Gems &
Jewellery sector) and Premier Trading House under Paragraph 3.10.2 of FTP and any other
agency authorised by RBI. Exporters (except EOUs and units in SEZ) may obtain gold /
silver / platinum from nominated agency(s). Procedure for import of precious metal by
these agencies (other than those authorized by RBI and the Gems & Jewellery units
operating under EOU and SEZ schemes) and the monitoring mechanism thereof shall be as
per the Provisions laid down in HBP v1.
15. Diamond Dollar account: Firms and companies dealing in purchase/ sale of rough or cut
and polished diamonds s/precious metal jewellery plain, minakari and / or studded with /
without diamond and/or other stones, with a track record of at least two years in import or
export of diamonds / coloured gemstones/ diamond and coloured gemstones studded
jewellery / plain gold jewellery, and having an average annual turnover of Rs 3crores or

14

above during preceding three licensing years, may also carry out their business through
designated Diamond Dollar Accounts(DDA).
Dollars in such accounts available from bank finance and / or export proceeds shall be used
only for:
(i) Import / purchase of rough diamonds from overseas/ local sources;
(ii) Purchase of cut and polished diamonds, coloured gemstones and plain gold jewellery
from local sources;
(iii) Import / purchase of gold from overseas/ nominated agencies and repayment of dollar
loans from the bank;
(iv)Transfer to Rupee Account of exporter. Details of this DDA Scheme are given in HBP v1.
A non DDA holder is also permitted to supply cut and polished diamonds to DDA holder,
receive payment in dollars and convert same into Rupees within 7 days. Cut and polished
diamonds and coloured gemstones so supplied by non-DDA holder will also be counted
towards discharge of his export obligation and / or entitle him to replenishment
Authorisation.
16. Export on consignment basis: Gems & Jewellery exporters shall be allowed to export
diamond, gemstones & jewellery on consignment basis as per HBP v1 and Customs rules
and regulations.
17. Scrap / waste /remnants generated through job work may either be cleared from job
workers premises on payment of applicable duty on transaction value or destroyed in
presence of Customs / Central Excise authorities or returned to unit. Destruction shall not
apply to gold, silver, platinum, diamond, precious and semi-precious stones.

FDI Policy
For exploration and mining of diamonds and precious stones FDI is allowed up to 74% under the
automatic route.
Diamond Dollar account:
In an attempt to provide some relief to diamond exporters, the RBI has allowed them to
open Diamond Dollar Accounts (DDA) on a case-to-case basis. The RBI has asked banks to
open DDA accounts for exporters who comply with the eligibility criteria stipulated in the
government's Foreign Trade Policy. DDA holders would be allowed the following credits:
amount of pre-shipment and post-shipment finance availed in dollars; realisation of export
proceeds from shipments of rough, cut, polished diamonds and diamond studded
jewellery; and, realisation in dollars from local sale of rough, cut and polished diamonds.
Account holders would be allowed to pay for import or purchase of rough diamonds from
overseas or local sources as well as pay for purchase of cut and polished diamonds,
coloured gemstones and plain gold jewellery from local sources.
Payment for purchase of gold from overseas/ nominated agencies and repayment of dollar
loans availed from the bank would also be permitted along with transfer to rupee account
of the exporter.

15

Under the scheme of Government of India, firms and companies dealing in purchase / sale
of rough or cut and polished diamonds / precious metal jewellery plain, minakari and / or
studded with / without diamond and / or other stones, with a track record of at least 3
years in import / export of diamonds / coloured gemstones / diamond and coloured
gemstones studded jewellery / plain gold jewellery and having an average annual turnover
of Rs. 5 crores or above during the preceding three licensing years (licensing year is from
April to March) are permitted to transact their business through Diamond Dollar Accounts.
They may be allowed to open not more than five Diamond Dollar Accounts with their
banks.
Eligible firms and companies may apply for permission to their AD Category I banks in
the format prescribed
Documentation
At present, for export of cut and polished diamonds, an exporter has to make 21 invoices, 2 GR
forms, 3 Green Delivery Challans and 4 Shipping Bills per shipment. Total number of documents
being filed is 30. We recommend that this may be reduced to 7 invoices; 2 GR forms; NIL green
delivery challans and 3 shipping bills. Hence the total numbers of documents proposed are 12.
(a) 21 invoices :
Department Present No. of Copies
Custom 5
CHA 5
Bank /
Exporter 11
Total 21

b) GR Form: 2;
Department Present No. of Copies
Custom/RBI
Presently 2 copies of GR Form are required for
Custom/RBI purpose. Filing of GR form is not necessary for
the goods upto US$ 25000.

c) Green Delivery Challan (Exporters Declaration): 3;
Department Present No. of Copies
3
d) Shipping Bill : 4

16

Department Present No. of Copies
CHA 1
Customs Stats
Department 1
Custom Record Dept 1
EP Copy 1
Total 4

4. VOLATILITY IN DIAMOND TRADE

The diamond industry in general has been facing severe headwinds in the last 5 years, since the
onset of the financial crisis, which has changed the nature of doing business :
Diamond price volatility has become a new challenge which all diamond companies
now have to face. In the past, prices of both rough and polished were stable, with a steady
annual increase of 1-4%. Post global economic turmoil in 2008, the scenario has changed.
The industry experiences periods of volatility, where prices can change much in a short
time. Price falls are typically more severe than the increases. The reasons for this volatility
is :-
a. Changing demand patterns of emerging countries like China
b. Fragmentation of rough supplies, with De Beers now accounting for 35-38% of rough
supplies as compared to previous 85% of supplies, and hence rough producers now
preferring to sell what is produced, rather than holding goods to maintain prices
c. Increased speculation in rough and polished trading by few entities
The volatility in prices makes it extremely difficult for manufacturers to be able to
predict their profitability. Manufacturers will have a rough purchase to polished sales
cycle of 3-6 months. In addition to this the fluctuations in the value of the Indian Rupee has
further increased volatility as diamonds are essentially priced in USD in the international
market.
Fragmentation of rough supplies has meant that the attitude of rough producers is that
they want to maximize the revenues for their rough at the cost of their customers.
Large producer like Alrosa and De Beers, who have long term supply contracts, are quick to
raise prices, while they maintain high rough prices when polished prices fall. Long term
contract customers continue to pay the high prices and bear losses to ensure that their
supply contract continues.
The value addition of the diamond polishing sector has reduced to 15-20% from the
20-25% which it commanded over a decade ago. Over the last decade, the cost of value
addition from polishing has remained nearly static, while the rough and polished prices
have moved up. This is true even in India, which polishes lower quality goods, i.e where the
value addition is higher.

17

The pricing volatility makes it more difficult in diamonds, where typical mid-size
manufacturer would have over several thousand qualities of polished in stock. The
prices of each of these qualities can move independently, depending on the demand and
supply for each quality.


5. PAST TREND IN DIAMOND TRADE IN INDIA
Statistical Background:

Fig: Export-Import data of India in Diamonds
The major markets for cut and polished diamonds are Hong Kong, UAE, USA, Belgium, Israel etc.
the overall potential for growth in the cutting and polishing industry is limited, mainly due to the
restricted supply of raw materials i.e. rough diamonds in the country. However, the diamond
trading business, which is centered in Antwerp, Israel, can be attracted to the India, given the
large cutting and polishing activity that happens in India and the sizeable domestic market.
Indian Diamond Export

18


Fig: Indian Diamond Export

Fig: Major Destinations of Export

2009-2010
2010-2011
2011-2012
2012-2013
2013-2014(apr-sep)
0
2000000
4000000
6000000
8000000
10000000
12000000
14000000
DIAMONDS
2009-2010
2010-2011
2011-2012
2012-2013
2013-2014(apr-sep)
0
500000
1000000
1500000
2000000
2500000
3000000
3500000
4000000
4500000
5000000
Hong Kong U Arabemts USA Belgium Israel
2011-2012 4273465.88 2976724.12 2414325.98 1573885.09 694663.81
2012-2013 4493221.5 2346859.9 2758633.27 1221580.31 625985.65
2010-2011 3329929 4710147 1679010 922212.56 434659.11
2009-2010 2594740.87 2511651.6 1505998.31 738998 349664
2013-2014 2856693 2045015 1559112 718656 400591
A
x
i
s

T
i
t
l
e

Export Values (in Lakhs)

19


Fig: Major Import sources for India


Fig: Recent decline in export (analysis)
Recent decline in export (analysis)
The Indian Diamond Industry is currently going through a downturn phase. The total exports of
cut and polished diamonds during FY 2011-12 and 2012-13 (Apr-Dec) witnessed decline of 17%
and 36% respectively.
The main reasons are:
0.00
10,00,000.00
20,00,000.00
30,00,000.00
40,00,000.00
50,00,000.00
60,00,000.00
70,00,000.00
Belgium U
Arabemts
HongKong UK Israel
2009-2010 21,53,107.67 19,16,361.07 20,68,159.73 3,75,667.18 3,14,754.99
2010-2011 31,88,994.01 60,67,269.90 31,88,890.40 5,03,312.78 5,38,166.83
2011-2012 3934748 3549437 3307321 653008 614137
2012-2013 4494234 2986359 1893417 652576 648359
2013-2014 23,76,130.78 18,18,438.34 11,94,975.23 2,98,667.16 2,73,574.44
A
x
i
s

T
i
t
l
e

Import values( in lakhs)
2010-11
2011-12
2012-13
29,425.82
28,090.12
23,270.73
Fall In Exports: India

20

Record fall of rupee against the dollar, around 3 to 5 per cent decrease in the certified
polished diamond prices.
The certified polished diamond prices decreased by almost 5.5 per cent since late and
there is no reduction in the rough diamond prices.
Most of the diamantaires are holding their inventories anticipating further price reduction.
Industry sources said the dealers and jewellery companies in US, China, Belgium and UAE
are grappling with rising diamond inventories and falling prices, as the slack global
economy prolongs a year-long slump.
It is estimated that about $20-$25 billion worth of polished gems are in the diamond
inventories.
Reason: the diamantaires indulged in a large-scale round tripping or circular
trading of the polished diamonds by importing and exporting the same goods since
2009. US followed by UAE were the top destinations for round-tripping of goods.
Interestingly, the diamantaires were not in the position to import the polished
diamonds in 2012 following the Central government suddenly imposing 2 per cent
import duty on polished diamonds in January-2012.
Diamond prices are still struggling to recover since falling off a cliff over a year ago, when the
global economic outlook darkened suddenly, spoiling the plans of speculators who had stocked up
in anticipation of a stronger economic recovery after the 2008-09 crisis. Successive waves of the
European sovereign debt crisis kept prices low and leery lenders passed higher borrowing costs
on to diamantaires, the craftsmen who cut diamonds and who depend on financing for 90 per cent
of their rough diamond inventory.
Rise of chinas diamond trade
China has woken up faster than India. As China was already considering Africa as a major
investment destination for infrastructure, it included the diamond industry as part of the deal. It is
not an understatement to say China has a vested interest in developing Africas infrastructure
through loans underwritten by the continents vast natural wealth. Beijing has committed billions
of dollars in the resource-rich Dark Continent $6 billion to Congo, $8.4 billion to Nigeria and
$16 billion to Ghana.
The China Development Bank (CDB) announced last year it could invest up to $10 billion in
Zimbabwes mining and agro sectors. In 2012, President Robert Mugabe opened a new $98-
million military academy erected by Chinese contractors the project cost is being repaid by
Zimbabwean diamonds. China is initiating multi-billion dollar deals for rough diamonds in
exchange for goods it produces, ranging from medicines, oils, and industrial goods and services.
Chinas huge investments in Africa are a danger to the Indian diamond cutting and polishing
industry.
Chinas overseas investment policy, first outlined in its 10th Five-Year Plan (FYP, 2001-05), has
been reaffirmed in the latest 12th FYP (2011-15). While motivating Chinese firms to do business

21

abroad , the policy seeks to give them a competitive edge by making them acquire strategic assets,
securing access to natural resources, and establishing new markets for Chinese exports.
This is amply borne out by data on Chinas diamond output, import and export in 2006-2011:
while globally there was a 3 per cent fall in rough diamond supply, China recorded an over 20 per
cent increase in its rough diamond imports in carat terms and a 55 per cent increase in value
terms. Clearly, India will have to adopt strategies where it can move beyond conventional sources
of diamond supply. It will also have to ensure that the diamond industry is not burdened with
taxes which further hobble this industry. India cannot afford more loss of both jobs and export
earnings.
6. ISSUES AND CHALLENGES
Issues under BAP
Benign Assessment Procedure (BAP) was introduced in the Budget for 2007-08 by the MoF. As
per the BAP, the books of accounts of assessee shall not be subject to detail scrutiny if the said
assessee declares net profit of 8% or more of the turnover from the activity of diamond
manufacturing and trading. The said deemed threshold was subsequently revised to 6% as per a
CBDT issued Instruction Order No. 2/2008 dated 22.02.2008. The BAP in its present form is
available only to those Assessee whose profits and gains from the activity of manufacturing and/
or trading of diamonds is equal to or higher than the threshold of 6%. However, the said rate of
6% so prescribed is nowhere reflective of the reality in the diamond manufacturing and trading
industry, which operates on profit margins in the range of 1% to 3% only. It should be appreciated
by the MoF that if industry were to demand profit of 6%, it would have never earned the amount
of market share which it has gained by operating on low margins.
The value addition for the industry in India is to the range of 20-25%, as we deal with
smaller size and lower quality goods, which requires a higher labour content. Hence net
income is about 8-15% of such value addition of 20-25%, of the turnover, after considering
interest costs which are paid on the entire value of diamonds.
Diamonds are traded 2-3 times before they reach marketable lots. Considering one
-
3.75% on turnover (average of manufacturing and trading ranges) 12.5-30% of the value
addition
This not only resulted in ineffectiveness of applicability of BAP by the industry members,
but has in fact resulted in irrational deemed additional which have been subject matter of
various litigations.

Tax Challenges:
There are certain unique characteristics of the diamond trade which make it difficult for auditors
and investigators to accurately determine the profitability of an entity. The main issues which the
industry faces on the valuation front are as follows
There are wide variations in yields and in the Gross Margins as there are wide variations in
the processes and the yield due to the variation in the rough procured

22

In certain goods, companies have an option to sacrifice yield for better realization (either
through better quality or even different shapes). This option will make physical (carat)
yields less important. This will make comparisons still more difficult
Companies have different skills and the level of goods which are not polishable by a
particular company might also determine the yield
Unique nature of the industry leads to issues of cost allocation for stock in-trade and
market valuation thereof
There are multiple transactions in each parcel where parcels are assorted and remixed as
required by different customers and sources of diamonds. This repeated mixing and
assortment (where prices are assigned), makes it difficult to accurately put the cost to the
inventory
Multiple valuations depending on the characteristics of the diamond o Typical
manufacturers would have about 4,000 different qualities, most of which would need to be
priced separately
In many cases, parcels contain a mix of qualities, so that they become more marketable lots
(smaller quantities fetch lower prices, as these would be purchased by traders) This makes
valuation in assortment and mixing more complicated, and hence most diamond buyers
physically check and assort each parcel before they negotiate the price
Industry comparisons of profitability might also be quite different and can also be affected
by operating situation of the company. Given the small average manufacturing margins, the
impact can be quite substantial on overall profitability o The type of goods the company
deals with
The levels of leverage of a particular company, and hence their interest burden
Foreign exchange forward and option transactions, including those with banks, are an
integral part of the business operations as o Diamonds, are always priced and dealt in USD
Foreign exchange forward and option transactions are necessary to hedge Forex risks for
import/export payment/receipt actual as well as projected and bank borrowing
repayments. In a truly hedged scenario, when all receivables are hedged, it is possible that
in a strengthening rupee scenario, the profits are shown in the forward contracts, while in
reality the forex risk has been hedged
Most export bills are discounted with banks, and typically hedging transactions have been
carried out with banks
Indian Diamond Trade: other Risk
Based on research conducted, analysis of case studies collected by the project team and after
consultation with the private sector, the report concludes that the diamonds trade is subject to
considerable vulnerabilities and risks. The closed and opaque nature of the diamonds markets and
the high value of diamonds combined with a lack of expertise in this area on the part of the
authorities have left this industry susceptible to abuse by criminals.
The diamonds trade has existed for centuries. It has developed a unique culture and trade
practices, which have their own characteristics and variations across countries and
continents. However, the international diamond trade has changed in the last few decades:

23

De Beers no longer holds the same all inclusive diamonds monopoly.
A number of smaller diamond dealers have entered the market.
Distribution channels have become more diverse.
New trade centres have emerged with billions of dollars' worth of diamonds, and financial
transactions go in and out of newly founded bourses and their ancillary financial
institutions.
Cutting and polishing has shifted (except for the most valuable stones) from Belgium, Israel
and the US mainly to India and China, with smaller cutting centres emerging.
Cash transactions are still prevalent but the usage of cash is diminishing.
The internet, as in all other facets of life, is rapidly taking its place as a diamonds trading
platform.
These significant changes in the "diamonds pipeline" structure and processes raised the
question of whether the risks and vulnerabilities remain the same and whether current
anti-money laundering / countering the financing of terrorism (AML/CFT) standards and
national regulations are sufficient to mitigate the different ML/TF risks and vulnerabilities
identified in the research.
Some of the risks and vulnerabilities of the diamonds trade are:
Global nature of trade - The trade in diamonds is transnational and complex, thus
convenient for ML/TF transactions that are, in most cases, of international and multi-
jurisdictional nature.
Use of diamonds as currency - Diamonds are difficult to trace and can provide anonymity
in transactions.
Trade Based Money Laundering (TBML) - The specific characteristics of diamonds as a
commodity and the significant proportion of transactions related to international trade
make the diamonds trade vulnerable to the different laundering techniques of TBML in
general and over/under valuation in particular.
High amounts - The trade in diamonds can reach tens of millions to billions of US dollars.
This has bearing on the potential to launder large amounts of money through the diamond
trade and also on the level of risks of the diamonds trade.
Level of awareness - Law enforcement and AML / CFT authorities, including financial
intelligence units (FIUs), have limited awareness of potential ML/TF schemes through the
trade in diamonds.
India reported a relatively large number of sanitised cases (12) in which suspicious
transaction reports were received (in connection with diamond trade). In these specific
cases, Hong Kong, China is a destination for illicit cash flows related to the diamond trade.


7. Export Strategy For Dubai And other recommendations
Growth potential: World

24

A balanced market over the next four years, with a growing gap between supply and
demand longer-term. The rough-diamond market is expected to remain balanced from
2013 through 2017. From 2018 onward, as existing mines get depleted and no major new
deposits come online, supply is expected to decline, falling behind expected demand
growth that will be driven by China, India and the US. Over the next 10-year period, supply
and demand are expected to grow at a compound annual rate of 2.0% and 5.1%,
respectively. The supply-demand outlook carries different implications for industry
players at different points along the value chain, and it will impact the way they manage
their business activities over the next four years and in the longer run.



Fig: World Diamond Supply forecast

Fig: World Diamond Demand forecast
0
100
200
300
400
500
600
2012 2014 2016 2018 2020
Lower
Base
Higher
World diamond production forecast
0
50
100
150
200
250
300
350
400
2012 2014 2016 2018 2020
A
x
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s

T
i
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World diamond Demand forecast
Higher
Base
Lower

25


Upstream: a focus on operational excellence, strengthening the asset portfolio and
adjusting the development pipeline. With stable market conditions in the next four
years, mining companies are likely to focus on maintaining healthy balance sheets,
attaining operational excellence and investing in technology to improve productivity. Given
the supply-demand balance outlook, mining companies are also expected to carefully
review their development pipelines to identify the projects that promise the highest
returns.

Middle market: continuing consolidation. The middle market has traditionally garnered
the lowest margins along the diamond value chain, with some companies earning as little
as 12%. Further consolidation and integration is expected in the middle of the value chain
in order to maximize margins through scale and scope.
Downstream: ensuring security of supply. Diamond jewelry retailers will be looking to
capitalize on the growing demand for diamonds. Their key challenge will be to secure an
adequate and consistent supply of polished diamonds in the range of sizes, shapes and
colors suited to their product lines. A number of premium retailers have already integrated
backwards along the value chain by investing in mining assets and cutting and polishing
operations and securing access to primary rough supply. This trend is expected to
continue.

Major Export Destination: UAE Strategy
The United Arab Emirate (UAE) has beaten the US to become the top export destination for cut
and polished diamonds in the last five years, , especially in world's biggest diamond cutting and
polishing centre in Surat.
The polished diamond trade between India and UAE was not so impressive a few years ago.
The polished diamond trade picked up after 2004 after a few of the big diamond companies
and traders from India set up their offices in the free zone of Dubai Multi Commodity
Centre Authority (DMCC)
Dubai, a key destination for polished diamond exports from India, is fast emerging as a
significant diamond hub driven by demand from the growing Indian and Chinese middle
class.
Dubai's location means it can serve as the gateway to parts of Africa and West Asia.
To facilitate the import and export of over US$35 billion of diamonds through Dubai is an
amazing achievement, especially under the challenging economic environment.
Polished diamond imports during the twelve months of 2010 rose 88 per cent to 90 million
carats ($13.3 billion)
Dubai is set to reinforce its position as the worlds third largest diamond trading hub with
the value of 2011 trading set to surpass the $35 billion mark achieved in 2010,

26

DMCC, set up in 2002 as a strategic initiative to enhance commodity trade flows by
providing the physical and financial infrastructure, is committed to support industry
initiatives that are in line with its vision.
Bigger trade coming through Dubai and maybe the diamond financing will add even more
stability to the diamond business in Dubai.
DMCC, which provides the infrastructure for the citys commodities trade, ranks Dubai as
the world's fourth largest diamond trading hub, behind Antwerp, New York and Mumbai.


Challenges:
UAE: barrier to growth: The GCCs tense diplomatic relationship with Israel has been
mooted as a barrier to the growth of Dubais diamond trade, as Israeli jewellers play a
prominent role in the wholesale industry. But the mines are not in Israel; the productions
are not from Israel, that's the trading centre. They are competing as they are, they are a
very strong competitor but as far as Dubai is concerned, our biggest trading partners is
India, and Europe and Africa.
Problems of Round tripping: Dubai. The UAE, Indias top export destination, kept only 6.8
per cent of the massive $12.43 billion worth of polished diamonds it imported from India.
Rest of the consignment went back and forth between India and the UAE, four to five times
before they went down the pipeline
Recommendations:

TAX RELATED:
0.00
10,00,000.00
20,00,000.00
30,00,000.00
40,00,000.00
50,00,000.00
Diamond export
Indian Export to UAE
2008-2009
2009-2010
2010-2011
2011-2012
2012-2013

27

1) The industry would like to see the profit rates for computation of income tax under BAP to
be reduced to 2.5% to enable such trust to develop. This rate would encourage the majority
of the industry to become opt for the BAP and become compliant.
2) Allow for duty free re-import quota for cut and polished diamonds to the tune of 15% of
the previous years exports in value terms: In January 2012, the government introduced a
2% import duty on cut and polished diamonds. The industry, through the GJEPC, had
requested such a measure to prevent the round tripping of diamonds, which leads to an
inflated import and export for the country. While this measure has had its desired effects, it
has also meant that
In above cases, though genuine returns, exporters are asked to pay the 2% import duty
Indian companies, who used to import rough diamonds polished at their factories outside
India, to get the quota of roughs from those countries like Botswana are also
disadvantaged.
Allowing companies a duty free re-import quota up to 15% of the previous years export
turnover, will enable companies to avoid such disputes and also enable companies with
factories abroad to import polish into India. The relatively small percentage will discourage
any abuse of this quota in terms of round tripping.
3) Establishment of a Special Notified Zone (SNZ) for import of rough diamonds, where net
income is fixed and taxes are paid only on invoices raised to Indian companies and not on
re-exports
4) For the Diamond Sector, the system of Honorary Valuation Panels at ports of Surat and
Mumbai for any valuation disputes, a mechanism which was operational well prior to
Notification no 94/2007 and 95/2007 may be continued with and accordingly added in
such notifications for the Special Valuation Branch in case of valuation for diamonds. After
the notification following things have come which lead to further delay.
Diamond parcels are checked by specially appointed and trained customs appraisers
o 100% of all parcels are checked for weight
o 25% of all parcels are checked for quality and value
5) Looking at the fact that India does not produce rough diamonds and almost 90-94% of the
end product of cut and polished diamonds that are manufactured in India gets exported
any indirect taxation on the sector will only result to export of taxes, the industry should be
declared as zero-rated indirect tax regime and all duties collected in way of Service Tax,
VAT or GST should be refunded by way of drawback at the rates computed by way of
survey of actual exports.

POLICY RELATED
1) Establish a special fund by RBI to the tune of USD 3-5 billion for the refinance of borrowing
given to non-petroleum export industries, which have a high import content of more than
70% of their exports. In case of inability of the Govt. to provide such facility, such sectors
should be allowed to arrange for ECB in foreign currency for their working capital
requirements for purchase of raw material.

28

2) 2% interest subvention scheme should be extended for the entire gem & jewellery
exporters as it was done in the year 2008-09
The 2% interest subvention scheme on rupee export credit is currently applicable for only
SMEs in gem and jewellery Industry. The high turnovers in the industry exclude most
companies outside the SME definition. However many small diamond companies are forced
to borrow in rupees at high interest rates making them uncompetitive in the international
market.
3) Just as China backs its trading community to the hilt and includes them in its overseas
ventures, India should follow an aggressive policy towards its investments overseas.
Following Chinas example, the diamond industry could be part of the deal on
infrastructure ventures. Government efforts are a must.
4) An Export duty of 2 per cent could be levied by the Government and charged to the
polished diamond exporters. The revenue raised could be used as a corpus for benefiting
the diamond industry workforce, enhancing their job security and livelihood.
PROCEDURES RELATED:
1) Reduce documentation requirements for exports from 23 to 12 copies as suggested and
agreed during the previous task group formed for the industry in the year 2006.
a) GR Form: 2;
Department
Recommended No. of Copies (present number in
brackets)
Custom/RBI 3(5)
CHA 2(5)
Bank /Exporter 2(11)
Total 7(21)

b) GR Form: 2(2)
Department Recommended no. of Copies
Custom/RBI
It is recommended that 2 copies of GR Form should be
filled in for Customs/RBI purpose. Further, it is
recommended that the limit of clearing the goods without
filling the GR Form should be extended upto US$ 10,000
for general firms and US$ 3, 00,000 for status holders.

c) Green Delivery Challan (Exporters Declaration): NIL(2)
Department Recommended no. of Copies

NIL (The declaration may be incorporated in the invoices
and / or GR form


29


d) Shipping Bill : 3
Department
Recommended no. of Copies (Present no. in
brackets)
CHA 1
Customs Stats
Department/ Custom
Record Dept 1(2)
EP Copy 1
Total 3(4)

OTHER RECOMMENDATIONS FOR STREAMLINING THE PROCEDURES ARE AS FOLLOWS:

1. Separate Customs Appraisal for & processing for import & export parcels, as the
objectives of these processes are different a) Imports need to be valued correctly with
100% appraisal as it is from a revenue perspective
b) Exports are checked as follows (i) 100% of exports checked for carats, rate per carat and
value only
(ii) 25% of exports are considered for detailed valuation
(iii) Current documentation procedure to be brought in line with international centres,
where only point 1.b.i is checked. Checking of detailed diamond characteristics to be
discontinued
2. Increase in number of appraisers & officers for Gem and Jewellery at the Customs
Outposts
3. Increase in the operating hours of Customs involved in clearance of consignments of
Gem and Jewellery items , along with keeping it open on Saturdays and to enable seamless
exports to avoid delays
4. Implementation of EDI system at Customs and also the implementation on online
payment gateway system
5. As per Notification no.1009RE-20100/2009-14, goods which are 0.25 carats and above
only are authorized for export and reimport for certification and grading purposes.
Advances in grading technologies and greater customer interest in buying certified stones
has meant that stones which are even 0.10 0.15 carats in size are now being certified
increasingly. Therefore this limit of minimum stone size for certification and grading
should be reduced from 0.25 to 0.10 carats.
6. Consider allowing rough diamond consignment export for certification purposes a) Some
rough diamonds difficult to differentiate from treated goods after polishing (potential price
impact of up to 30-40%)
b) Labs accept and test rough diamonds before polishing and certify on that basis c) It will
encourage the polishing of larger diamonds in India


30

7. Policy for Beneficiation of Indian diamantaires for Diamonds Mined in India
Over the last 20-30 years, there has been no significant mining or discovery of mines of
rough diamonds in India.
India should consider ensuring
All rough assortment of diamonds, mined in India, should be done in India only
Indian companies should have the first right of refusal to buy any rough which is
produced from the mine
Rough can be exported, only if there are no Indian buyers for that rough at the
export value

8. Pursuing Free Trade Agreements with countries which are consumers of diamonds and
jewellery but have prohibitive import duties on diamonds like Brazil and Russia
9. Establish separate funds for a) generic promotion of diamonds and b) promotion of
Indian-made jewellery, in key markets
10. Create an Rs 200 Crore Technological Up-gradation Fund Scheme (TUFS) to enable
small manufacturers of diamonds and jewellery access latest manufacturing technologies.
11. In addition, government should establish more designing institutes of jewellery
patterns especially in major cities.
12. Looking for sources other than Africa, India has now asked Russia to push Alrosa for
long-term supply contracts so that more Indian companies can source rough cuts from the
mining giant. The move could enable Indias state-run trading company MMTC Ltd and
the Hindustan Diamond Company Private Ltd (HDCPL) to apply for roughs from Alrosa.
Anand Sharma, Indias minister of Commerce, Industry and Textiles, reportedly made a
request to this effect to E. Nabiullina, the Minister of Economic Development of Russian
Federation during the latters visit to Delhi.
13. Ultimately both the diamond industry (importers, exporters and others along the
value chain), and the Government need to work together to restore Indias premier
position. The country once produced the worlds best 2A quality diamonds from its own
Golconda mines in Hyderabad.
14. Diamonds are said to be a womans best friend, but not any longer! Consumer
preferences have shifted to electronic good such as iPads, iPhones, Tablets and such
others, which explains why the jewellery giants of the world advertised much less or
didnt at all in some countries, when compared to consumer electronics giants such as
Apple or Samsung. So we need to be much more innovative on this front.










31

APPENDIX

1. Trade map: www.trademap.org/
2. Department of commerce : http://commerce.nic.in/
3. Indias Foreign trade policy 2009-14: http://dgft.gov.in/
4. Report: Task Group Diamond Sector 11thFeb2013:
http://commerce.nic.in/publications/Report_Task_Group_Diamond_Sec
tor_11thFeb2013.pdf?id=25
5. Bain report: The global diamond report 2013:
http://www.bain.com/Images/BAIN_REPORT_The_global_diamond_rep
ort_2013.pdf
6. Money Laundering through trade in diamonds: http://www.fatf-
gafi.org/media/fatf/documents/reports/ML-TF-through-trade-in-
diamonds.pdf