Reserve Bank of India (RBI) in its circular dated 06-05-2011 has revised guidelines for import of Rough, Cut and Polished Diamonds. Extracts are given below.

Supplier’s Credit and Buyer’s Credit (Trade Credit) including the usance period of Letter of Credit (LC) opened for import of rough, cut and polished diamonds has been restricted to 90 days from the date of shipment from immediate effect.

Banks have been also advised to ensure that due diligence is undertaken and Know-Your-Customer (KYC) norms and Anti-Money Laundering (AML) standards, issued by RBI are adhered to while undertaking the import transactions. Further, any large or abnormal increase in the volume of business should be closely examined to ensure that the transactions are bona fide and not intended for interest / currency arbitrage. All other instructions relating to import of rough, cut and polished diamonds shall continue.

The earlier instruction issued for import of gold, import of platinum / palladium / rhodium / silver and advance remittance for import of rough diamonds shall remain unchanged.

In a clarification circular issued by RBI, even on jewellery, tenure for buyers credit has been restricted to tenure of 90 days.

Reference

1. RBI Circular : Fema 1999 – Import of Gold in any form including Jewellery – Clarification: Dated: 24-09-2012
2. RBI Master Circular on External Commercial Borrowing (ECB) and Trade Credit: Dated: 01-07-2013
3. RBI Master Circular on  Import of Goods and Services: Dated: 01-07-2013
4. RBI Circular for Buyers Credit and Suppliers related to of import of Rough, Cut and Polished diamond: Dated: 06-05-2011
5. RBI Circular for Import of Platinum, Palladium, rhodium, and Silver: Dated: 28-01-2008