DIAMOND IMPREST LICENCE (Syllabus: GS Paper 3 – Economy)

Context: Union Minister of Commerce & Industry of India announced the introduction of Diamond Imprest Licence.

Diamond Imprest Licence

• About: The licence permits eligible exporters to import cut and polished diamonds, including semi-processed, half-cut, and broken diamonds.
• Import Limits and Value Addition: Exporters can import diamonds up to 5% of their average turnover from the past three years, with a requirement to add 10% value.
• Restrictions on Use: Imports under this licence must be used by the importer and cannot be transferred, even after the completion of exports.
• Historical Context: This licence was previously part of the foreign trade policies of 2002 and 2009.
• Significance for MSME Exporters: The licence will provide a level-playing field for Indian MSME diamond exporters, prevent the flight of investment, and create additional employment opportunities.
• Impact on Indian Diamond Exporters:

o The Diamond Imprest Licence will benefit MSME exporters, a significant segment of India’s gem & jewellery export sector, by allowing them to import up to 5% of their average export turnover over the past three years. 

o This change aims to align MSME exporters with their larger counterparts and mitigate the outflow of investment to diamond mining regions.

Gem and Jewellery Export Promotion Council (GJEPC)

• About: It set up by the Ministry of Commerce, Government of India (GoI) in 1966.
• It is one of several Export Promotion Councils (EPCs) launched by the Indian Government, to boost the country’s export thrust, when India’s post-Independence economy began making forays in the international markets.