The Gems and Jewellery Export Promotion Council has urged the Centre to give its nod allowing advance remittance to import rough diamonds from Russia since the license permitting such imports would expire on December 30.
Speaking to Business Standard, GJEPC chairman Sanjay Kothari said, "An advance remittance of around $10 million is needed to import unpolished diamonds from Russia as the license given to Russian rough exporters is expiring later this month."
The council had met commerce ministry officials to press on the issue.
The efforts to cooperate in diamond trade with the Russian Federation has been continuously pursued for quite some time and a protocol of Intentions for trading in rough diamonds and precious metals was signed between ministry of commerce and industry and ministry of finance, Russian Federation, during President Putin's visit to India in October 2000.
In February 2001, a Russian delegation led by Mikhail Nikolav, president of the Republic of Sakha had called upon the Commerce Minister Murasoli Maran to discuss measures to increase trade between the two nations.
Though Russia is a leading exporter of roughs, India has not been able to import for the last two years due to restrictions on advance remittance.
"We have made several representations to government. The Reserve Bank of India has examined the case and said it has no objection in extending this facility but nod of the finance ministry is still awaited," he said, adding that Commerce and Industry Minister Arun Shourie has assured the council to take up the matter with the finance minister soon.
GJEPC wants to remove intermediaries like De Beers, Antwerp and Israel from imports as that would cut the extra 20 per cent cost incurred due to presence of intermediaries in the diamond trade and help in making India a diamond trading centre also.
Kothari said a delegation led by the Minerals and Metals Trading Corporation (MMTC) will leave for Russia next week. "However, if we do not get permission to make payment in advance, they will not be able to make imports," he added.
Kothari said in the absence of an enabling provision, MMTC has to import roughs indirectly through third countries like Israel and Sweden.
The council also impressed upon the government to avoid bringing import of gems under the transfer price regulation saying that this was meant for multinationals.
Elaborating on other initiatives of the council, he said an Indian Institute of Gems and Jewellery would be set up in Mumbai at cost of Rs 16 crore (Rs 160 million).
"While we have sought an assistance of Rs 6 crore (Rs 60 million) from the central government, the remaining Rs 10 crore (Rs 100 million) would be contributed by the industry. The institute is expected to become operational by April next year," Kothari said.
The share of diamond in the total exports still continues at 51 per cent as against two per cent share of jewellery, he added. He also said the council has set a $16 billion export target by 2010.