India's diamond trade hub in Mumbai is finally nearing fruition, as the Special Notified Zone (SNZ) for rough diamonds will become functional as from November. The intention is to bring relief to Indian traders who will be able to deal directly with international miners and save on money paid to middlemen. According to industry data, India polishes 85% of the rough diamonds sold globally, but only 15% of the stones are imported directly, the rest being bought through the middlemen. "The SNZ will bring a shift in market dynamics from Belgium and Dubai to India," said Dinesh Navadia, president of Surat Diamond Association.
Praveenshankar Pandya, the newly-elected chairman of Gem & Jewellery Export Promotion Council, told The Economic Times that, "We have communicated to all miners that the SNZ will become operational from November." As reported previously, income from display of uncut diamonds (without sorting or sale) carried out in an SNZ on or after April 1, 2015 will not be taxed. "This means that sample uncut diamonds will be kept in the SNZ for viewing. A buyer can select diamonds and place orders with the miners directly," Pandya said. "The miners will then send the consignments from their overseas offices. However, we have asked the government to introduce presumptive tax so that miners can directly sell their diamonds to the buyers."