Import of cut (or polished) diamonds has jumped fourfold this financial year to Rs 408.09 billion ($6.3 billion) from Rs 106.72 billion in 2016-17, according to commerce department data. Of the imports, worth Rs 320.28 billion, 78 per cent was from unspecified sources, raising questions over the sudden increase in imports.
Imports from Hong Kong, the biggest source of polished diamonds, was down 25% to Rs 38.48 billion from the year-earlier period.
Experts told The Economic Times that such an occurence was uncommon as any import from unknown sources are generally marked to specific countries when the numbers are reconciled.
Gems and Jewellery Promotion Council chairman P S Pandya told the business daily that the import figure should not have been more than $2 billion in the normal course.
Interestingly, the imports of roughs, which generally dips in case of increase in import of cut diamonds, has not gone down in the same period. Polish diamonds exports has also not seen any significant increase.
The Directorate of Revenue Intelligence had flagged the use of diamonds and precious stones for trade-based money laundering in 2013 and 2014. The development comes at a time when the diamond industry is under increased scrutiny due to 114-billion alleged fraud at Punjab National Bank by jewellers Nirav Modi, Mehul Choksi and their companies.
The government raised import duty on cut and polished diamonds in the recently presented 2018 budget.