This content was first published on IGR – Italian Gemological Review no. 4 in 2018. The information provided here is therefore current as of the original publication date.
In February 2018, the Indian Minister of Finance Arun Jaitley doubled import duties on cut diamonds and precious stones to 5%. This restrictive manoeuvre originates from the realisation that, strangely, the leading country in the manufacturing of cut diamonds, is not self-sufficient and must rely on heavy imports. How was such a condition generated? In 2007 the Minister of Finance Chidambaram had even abolished the rights on imports on worked diamonds. However, it was a strategy aiming to favour the launch of jewellery industry. In fact, the scope was to make the country, beside one of the undisputed leaders in the production of diamonds, also a global hub for the trade of this gem in all its phases of use.
In 2011/2012 the import of diamonds registered a record amount of 21 billion dollars, 6% of the total goods purchased abroad, a really huge sum. A trend that seems to be continuous. Between 2017 and 2018 the country exported 14 billion US$ importing 5. The trend appeared to be inconsistent mainly based on the realisation that the increased imports of worked diamonds did not match a subsequent increase in the jewellery exports. If these are not diamonds delivered by foreign buyers, where is the point in importing such a huge quantity? The first to raise an alarm was the Financial Action Task Force (FATF), an intergovernmental entity performing international supervision tasks in the money laundering field. In a document drawn in the late 2013 they take into consideration the international trade of diamonds, whose high volumes in such countries as India lead to think to illegal manoeuvres, money laundering or evasion.
They mainly fear that a laundering and evasion system was created playing on fake exports and reintroducing gems in the country. On the contrary, we could think of an increase in the export levels to launder money. In such a context, in February 2018 a scandal shakes Mumbai. Nirav Modi, with a personal patrimony valued by Forbes as 1.75 billion dollars, is accused of bank fraud with his uncle Mehul Choksi. It is a big name of Indian Jewellery that established himself with numerous stores and became very popular. In May, a folder of accusations started to take shape. The companies linked to Modi would have fraudulently obtained over 8 million euros from Punjab National Bank as loans to exports reintroducing on the Indian market diamonds meant to be exported in duty free areas (SEZ).
A new update about the news is available: “In manette il diamantaro indiano che ha truffato alle banche 2 miliardi di dollari”
