Nirav Modi scam once again raises concerns over round tripping of diamonds
Nirav Modi's alleged fraud
came to light only after he failed to secure fresh loans to service his
existing debt. And, the news of the purported crime committed by Modi and Gitanjali
Gems groups has once again brought the issue of illegitimate havala channels
and round tripping of diamonds centre stage.
Diamond business is
predominantly involved in imports and then exports. Round Tripping is the
practice of traders exporting the same stock of polished diamonds multiple
times to borrow from banks against the receivables at a lower interest rate.
India is the biggest
processor of rough diamonds globally. In 2017-18 till January, according to the
Gem & Jewellery Export Promotion Council (GJEPC) data, India exported rough
diamonds worth $1.175 bn against last full year’s $1.5 bn.
India’s import of polished
diamonds was also $1.88 bn in the 10 months this year. Even the proportion of
return consignment doubled in the last two years and remained high. When
diamonds are sent abroad for sale on a consignment basis, some unsold diamonds
come back but that proportion has doubled over the last couple of years.
Sources say that “diamond
trade continues to be a route to launder money by sending dollars abroad or
bringing official dollars in India as per trade requirements.” With government
increasing the import duty for polished diamonds earlier to 2.5 per cent and
now 5 per cent, the modus operandi keeps changing and non standardization of
prices and synthetic diamonds have spoiled the sanctity of the trade.
Thanks for the useful information. It's more informative and easy to understand. Please help me suggest Best cbse schools in sharjah
ReplyDeleteThis is a great inspiring article.I am pretty much pleased with your good work. Please share something on Best indian cbse schools in dubai also. Keep it up.Keep blogging.Looking to reading your next post.
ReplyDelete