As the Christmas holidays and Chinese New Year approach, demand for Indian diamonds is again on the increase. Ashok Gajera, the Managing Director of Laxmi Diamond, a Mumbai based diamond business, said: “The Christmas demand has been encouraging in the US. Chinese New Year purchases have also picked up. The processing units in Surat are working in full swing ever since they opened after the Diwali break.” This news is promising amongst a landscape of post-GST problems for the fashion and jewellery industry.Approximately 90 percent of India’s diamond industry is based in Surat and around two and a half million workers are employed in the industry there. Dinesh Navadiya, the President of Surat Diamond Association, explained that traders in the diamond hub, although pleased at the recent market trend, still hoped that the government would get rid of the three percent Goods and Services Tax (GST) required for business to business transactions. “We had met finance secretary Hasmukh Adhia recently. He assured us that the matter will be looked into at the next GST Council meeting. Otherwise, we are happy because of the Modi government’s move to make it a tax compliant and more transparent trade,” said Navadiya.

The new GST regulations have been hardest for smaller diamond businesses who have less resources to handle GST regulations and the paperwork necessary to stay on top of them. Bigger firms also tend to be export-oriented and so cash is less of a worry for them as for small, domestic-focused firms. The diamond appreciating in value is therefore a boost to the industry but not enough to make businesses accept the new GST rates.