Rough diamond processors seek tax sops for shifting units

A group of rough diamond processors, led by the Gems and Jewellery Export Promotion Council (GJEPC) Chairman Rajiv Jain, met Madhya Pradesh Chief Minister Shivraj Singh Chauhan, seeking tax relief for shifting manufacturing units from Surat, Gujarat, to Indore.

“The diamond processing industry, across the country, is currently paying a uniform 33 per cent tax to the government. We are seeking anything lower than the prevailing tax and a long-term commitment from the state government for considering an investment plan. Otherwise, shifting a manufacturing unit from Surat to Indore makes no sense,” said Jain.

The MP government has been striving for over two years to bring diamond processing business from the existing world’s largest hub - Surat - to Indore where a diamond processing park is proposed to be set up. In order to commence the proposed Park in two years, the government has expedited land acquisition and has acquired around 350 acres so far. The chief minister invited business communities once again here on Friday to set up a manufacturing facility in Indore to process rough diamond produced by the global miner Rio Tinto in Bunder mine in the state.

The investor communities, however, sought assurance from the state government to formulate a long-term policy and provide tax incentives for considering the proposal.

The major aim of the chief minister is to process entire rough diamond produced by Rio Tinto within the state and send only finished jewellery outside. Therefore, the proposed park should be ready and manufacturing units be in place before Rio Tinto starts commercial production in 2016. Rio is currently exploring diamond mines in eight Indian states.

Rio, however, has not yet formulated a final strategy for the treatment of its rough diamond from Bunder project.

“We have not yet decided whether to sell our entire rough diamond output in India our send outside for processing,” said Brude Cox, managing director of Rio Tinto Diamonds.

Commenced exploration in 2001, Rio has produced around 3,000 carat of high quality coloured rough diamond so far from the Bunder project out of an inferred resources of 37 million tonnes containing 27.4 million carats. With an estimated mine life of 25 years, the company plans to invest around Rs 2,200 crore of which Rs 384 crore has already been invested.

Surat, meanwhile, has been the largest diamond processing hub in the world cutting and polishing around 85 per cent of roughs produced globally. Accommodating over 5,000 diamond cutting and polishing units of all size, the city possesses around 500,000 skilled manpower dedicated to this industry.

Meanwhile, Rio introduced first of its diamond jewellery collection in India. Titled Courageous Spirit, the jewellery features a magnificent statement necklace and a set of complementary earrings. Designed by the famous jewellery designer Reena Ahluwalia, the collection incorporates a total of 25.34 carats of polished Bunder diamonds and 2.8 carats of rough Bunder diamonds, including a 5.04 carat round brilliantcut white diamond and a 5.02 carat round brilliant cut cognac diamond. The collection was manufactured by Mumbai-based jewellers Venus Jewels and Mahindra Brothers.

Cox, however, was confident that the diamond produced from Bunder mines is set to fetch a premium over the existing best quality white diamond available in the world.

The Bunder resource has been identified as being the seven times richer than the Panna diamond mine, the only operating diamond mine in India with a likely production rate at least 20 times greater than Panna. This would rank MP amongst the top 10 diamond producing regions in the world in terms of volume and value.