Finance Minister Arun Jaitley today doubled the import duty on cut and polished coloured gemstones, and diamonds to 5 per cent.
The government has also hiked the basic customs duty on imitation jewellery to 20 per cent from the current 15 per cent.
The basic customs duty was doubled to 5 per cent on diamonds including lab grown diamonds-semi processed, half-cut or broken; non-industrial, cut and polished.
While exporters expressed concern over the increase in duty, domestic players hailed the decision.
"The duty would push the prices of jewellery studded with these gemstones and diamonds. It would impact price competitiveness of our jewellery," an official of the gems and jewellery export promotion council said.
PC Jeweller managing director Balram Garg said the move was aimed at encouraging local manufacturing and generation of jobs in the country.
"It is a positive decision of the government. It will help in creating jobs and promoting manufacturing," he added.
India mainly imports rough diamonds and stones. During April-December this fiscal, the country imported rough diamonds worth USD 14 billion, an increase of about 11 per cent over the same period previous year.
On the other hand, imports of cut and polished diamonds dipped 12.2 per cent to USD 1.74 billion during the nine-month period of the current financial year.
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