‘China arrests will halt illegal diamond trade’ | delhi | Hindustan Times
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‘China arrests will halt illegal diamond trade’

Indian officials have managed to get consular access to the diamond traders detained in China for alleged smuggling and met some of them individually.

delhi Updated: Jan 14, 2010 00:07 IST

Indian officials have managed to get consular access to the diamond traders detained in China for alleged smuggling and met some of them individually.

Stating this on Wednesday in New Delhi, External Affairs Minister SM Krishna said the Chinese authorities had been treating the Indians well and even served them vegetarian meals.

On January 8, the Anti-Smuggling Bureau of Shenzhen in southern Guangdong province of China arrested 21 Indian diamond traders for alleged smuggling.

The incident came a day after three Chinese engineers had been arrested in India for alleged negligence that caused an accident in a Balco power project in Chhattisgarh’s Korba on September 23, killing 45 workers.

On Tuesday, the External Affairs Ministry sought details of the arrest in Shenzen from the Indian embassy in Beijing.

Vishnu Prakash, spokesperson of the External Affairs ministry, said on Wednesday that the traders were accused of transporting diamonds illegally from Hong Kong to Shenzhen.

India’s diamond trade with China reached a new high, following the slowdown in the United States, European countries and of late Dubai. And traders admitted that about 50 per cent of India’s total diamond exports to China was being carried out illegally via Hong Kong.

The reason: There is no import duty on diamonds in Hong Kong, while in mainland China, there is a 4 per cent duty on jewellery manufacturers for re-exporting the stones and 18 per cent on local jewellers.

Hardik Hundiya, a diamond trade expert, confirmed: “Diamonds are officially exported to Hong Kong from where they are smuggled to China with the help of carriers.”

He said the carriers, or sometimes employees of some diamond processing firms, used carried the stones on their person to Shenzen. He said this part of the business would now stop immediately.

The Mumbai traders, however, said there were more people on the watch list of the Chinese authorities for about two months. “About 20 to 25 managed to reach safe destinations in Hong Kong or other places,” a trader said requesting anonymity.

“To do business officially in China, you have to become a member of the Shanghai Diamond Bourse,” said Naresh Mehta, secretary of a Mubai diamond hub, Pancharatna Cooperative Housing Society.

Mehta said the arrests in China would affect India’s business in countries like Taiwan and Korea too. “These countries too would now keep a strict watch on such practices.”