The country's Finance Minister, Arun Jaitley, made the announcement as part of his budget speech to Parliament.
The tax will be levied on natural and laboratory-grown polished stones as well as colored gemstones.
And criticism did not take long to come from India's gemstones and jewelry umbrella representative organization, the Gem & Jewellery Export Promotion Council (GJEPC).
The GJEPC's recently elected chairman, Pramod Agarwal, said in a press statement: “This move hampers India’s chances of becoming an international diamond trading hub. This move doesn’t provide India a level playing field vis-à-vis other peers such as Belgium, Dubai and Israel.
“We are disappointed with the increase in customs duty…as it was not included as part of the industry’s recommendations to the government. This move hampers India’s chances of becoming an international diamond-trading hub.”
However, Agarwal was willing to concede that the government’s decision to lower corporate tax for firms with annual revenue higher than around $40 million (2.5 billion rupees) would be of benefit to the gem and jewelry trade
