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| Indian workers polishing diamonds. Photo credit: Solitaire International |
February diamond imports fell 80 percent, year-over-year, to $476 million in February due to a 2 percent import increase for the precious gem, according to the India Gems and Jewellery Export Promotion Council as reported by the Times of India.
The tax has led to drastic drop in the “circular” or “round tripping” among the country's diamond dealers and manufacturers. These are deals in which the same goods are traded over and over to raise capital. The practice has reportedly come under fire, inside and outside the Indian diamond industry, according to reports because it allegedly involves defrauding banks, padding a company’s volumes or laundering money.
The import tax has also led to a decline in diamond exports, GJEPC reportedly said.