India's Woes Continue; Import Ban Extended, Polished Export Glut & Raging COVID-19

Manufacturing
02/07/2020 09:17

India's woes continue as more COVID-19 cases in Surat, which some deem a veritable infection hotspot, forced a week-long closure of manufacturing units. Meanwhile, the GJEPC and other industry bodies are extending the voluntary ban of rough diamonds from July 10-31st and said they will be calling on large producers to continue their flexibility towards long-term customers.  At the same time, as tensions continue to rise between India and China, traders are forced to reroute polished exports to Hong Kong, which are being blocked by Chinese customs. A few weeks ago, reports about a 2% equalisation levy on online sales added concern as some believe that the sales of rough and polished diamonds through online modules, for example in tenders, auction sales and online platforms, could mean an additional 2% would be slashed on top of the invoice of India-based buyers. Although it is still highly unclear whether or not a so-called "Google Tax" would apply to B2B diamond sales, some manufacturers are worried that a "perfect storm" is pushing customers away, and could cause India to lose its position as the world's prime diamond manufacturing hub.