Industrial Sector Updates – Industrial Policy, Ease of Doing Business, etc.

[pib] Diamond Imprest Authorization (DIA) Scheme

Schemes | Economics | Mains Paper 3: Effects Of Liberalization On The Economy, Changes In Industrial Policy and their effects on Industrial Growth
Note4Students

From UPSC perspective, the following things are important :

Prelims level: Diamond Imprest Authorization (DIA) Scheme

Why in the News?

The Department of Commerce under the Ministry of Commerce and Industry has launched the Diamond Imprest Authorization (DIA) Scheme to bolster the global competitiveness of India’s diamond sector.

About the Diamond Imprest Authorization (DIA) Scheme

  • The DIA Scheme permits duty-free import of natural cut and polished diamonds for export purposes.
  • It mandates an export obligation with a value addition of 10%.
  • Objective: To retain India’s leadership in the global diamond industry value chain by facilitating ease of doing business.
  • It will be implemented starting April 1, 2025.
  • Features of the Scheme:
    • Duty-Free Import: Allows duty-free import of natural cut and polished diamonds of less than ¼ Carat (25 Cents).
    • Export Obligation: Requires a minimum 10% value addition to ensure beneficiation.
    • Eligibility: Open to Two Star Export Houses and above; Exporters with annual exports of at least USD 15 million are eligible.
    • Support for MSMEs: Provides a level playing field for smaller exporters, enabling them to compete with larger players.
    • Global Beneficiation Practices: Inspired by beneficiation policies in diamond-mining countries like Botswana, Namibia, and Angola, where manufacturers must establish cutting and polishing facilities.

India’s Diamond Industry: Current Status

  • India processes over 90% of the world’s diamonds and provides jobs to approximately 5 million people.
  • India contributes 19% of total global diamond exports.

Challenges:

  • Exports Decline:
    • 2022: Exports valued at $23 billion.
    • 2023: Declined to $16 billion, with further declines anticipated.
  • Rough Diamond Imports: Fell by 24.5%, from $18.5 billion (FY 2021-22) to $14 billion (FY 2023-24).
  • Exports of Cut and Polished Diamonds: Dropped by 34.6%, from $24.4 billion (FY 2022) to $13.1 billion (FY 2024).
  • Inventory Challenges: The gap between net imports of rough diamonds and net exports of cut and polished diamonds widened from $1.6 billion (FY 2022) to $4.4 billion (FY 2024).
  • Returns of Unsold Diamonds: The percentage of unsold diamonds returned to India rose from 35% to 45.6% between FY 2022 and FY 2024.

 

PYQ:

[2018] Which one of the following foreign travellers elaborately discussed about diamonds and diamond mines of India?

(a) Francois Bernier

(b) Jean-Baptiste Tavernier

(c) Jean de Thevenot

(d) Abbe Barthelemy Carre

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