Amina – a homemaker living in Dhaka – recently bought a diamond ring from a Banani jewellery shop for Tk 35,000. Her purchase did not come with a guarantee of authenticity or any certification of quality.
The ring gave off the diamond glitter in the shop, but after using the ring for a few weeks, Amina noticed a lack of lustre. She took the ring to another jewellery shop to get it tested and found out that it was not made with diamonds, but moissanite – a much cheaper alternative.
Sharing her disappointment, Amina said, “I had to save up for years to buy that ring. But it was actually made of moissanite. I feel cheated out of my money. The shop that sold me the ring had claimed that it was made of real diamonds. They are now refusing to give me a refund.”
Amina’s situation is not an isolated one, as many in the city are buying diamond jewellery based on the sellers’ verbal assurance of authenticity, as the precious stone lacks any sort of official certification, which the gold jewellery has in Bangladesh.
Industry insiders say most of the diamond jewellery enters Bangladesh’s market through illegal channels. So, buyers should purchase diamond ornaments and jewellery only from brand outlets.
Speaking to The Business Post, Sananda Diamond Pvt Ltd Avijit Ghosh said, “There are more than 200 diamond jewellery traders in Bangladesh. Among them, only 10-12 traders have the licence to import diamond jewellery.
“We had started our diamond trade around eight years ago. We import rough diamonds from India through letters of credit (LCs). Consumers should be more aware while buying diamond jewellery, and check their authenticity at the showroom.”
He added, “Though diamond jewellery is more expensive in brand showrooms, they are authentic purchases. So consumers should always seek out brand outlets if they wish to buy ornaments made of real diamonds.
“Fake diamonds are cheaper. Artificially produced alternatives such as moissanite and zircon are being sold as real diamonds. Many such rings do not even contain any gold or diamonds. So buyers must closely inspect any ornaments before purchase.”
Discussing the pricing model, Avijit said, “The price of any diamond jewellery is set under four criteria – carat, colour, clarity and cutting. We can identify whether a diamond is real or fake by inspecting its colour and clarity.
“If there is still doubt, we test diamonds in a laboratory. It should be noted that fake diamonds enter Bangladesh through illegal channels, while real ones enter through LCs.”
According to the Bangladesh Jewellers Association (BAJUS), the country has an annual diamond market of more than Tk 5,000 crore. But diamonds worth only Tk 4.5 lakh were imported in each of the last four years on average.
Artificially produced moissanite or zircon stones are also entering the local market as diamonds.
High duty a key challenge
Industry insiders say Bangladeshi diamond importers have to pay high duty for diamonds, so they look for illegal channels. Bangladesh imports most of its diamonds from India, Dubai, and African nations.
Commenting on the issue, Bangladesh Diamond Merchant Association (BDMA) Director Md Enamul Haque Shah said, “Every customer should properly check their jewellery for authenticity.
“Diamonds are sold at almost all gold jewellery shops. The sector has a huge potential, as the people’s purchasing capacity has gone up significantly. So the sector should get proper policy support.”
Enamul, also a member of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), added, “Around 95 per cent of the diamond imports come from India. Our key challenge is to make diamond jewellery affordable for everyone.
“So, duty on diamonds should be reduced. We need government support in this regard.”
Echoing the same, BAJUS sources said high duty is a key barrier against expanding the diamond market and investment in the country. Bangladeshi importers have to pay 89 per cent – 32 per cent duty to import rough diamonds, which is 10 per cent in India.
Govt certification a must
Discussing the certification issue, Avijit said, “The demand for diamond jewellery has increased by 25 per cent – 35 per cent since 2015. The Bangladesh Standards and Testing Institution (BSTI) should provide certifications for diamond jewellery, similar to gold ornaments.
“This move can bring much-needed transparency to the country’s diamond market. Besides, tax rates should be reduced in the next budget to make such jewellery more affordable in the local market.”
Meanwhile, BDMA Director Enamul said, “The government should form a unique policy for further developing this sector, and necessary steps should also be taken to stop smuggling as money laundering is being committed through it.”
Diamond World Ltd Managing Director Dilip Kumar Agarwala said, “Many people who want to buy diamond jewellery are unable to do so due to a lack of affordability, and a lack of reliable companies in the market.
“We are trying to develop an international standard training institute to create skilled manpower for the sake of the sector’s development.”
Govt losing nearly Tk250cr annually
According to BAJUS, India occupies 31 per cent of diamond exports to the international market. Though there is a good demand for handmade ornaments globally, Bangladesh has no presence in this arena.
The government can collect Tk 180 crore – Tk 250 crore in revenue annually from the diamond market if the duty for rough diamond imports is reduced.
To help curb the smuggling of diamond ornaments, BAJUS proposed to reduce Customs Duty (CD) to 10 per cent from the current 25 per cent, and Subsidiary duty (SD) to 10 per cent from 20 per cent on rough diamonds in the budget for FY24.
The association also proposed reducing SD to 20 per cent from the current 60 per cent on polished diamonds, under the condition of 40 per cent value addition.
At a recent event, BAJUS President Sayem Sobhan Anvir said, “Bangladesh has to import 100 per cent of diamond products to meet the local demand. So, a lot of money goes abroad. A high tax rate encourages tax evasion.
“It is also a key barrier to expanding the market. The sector can play a significant role in exporting diamond ornaments and earning revenue if the duty rate is kept at a reasonable level.”
CIID working to halt diamond smuggling
Speaking to The Business Post, CIID Director General Mohammad Fakhrul Alam said, “We have been making sincere efforts to stop the smuggling of gold and diamond. We always try to detain the smugglers while conducting drives.
“Though the government made a gold policy on the traders’ request, it did little to curb the smuggling of this precious metal. So, it is tough to tell whether a reduction in duty would curb the smuggling of diamonds.”
He added that the BSTI and Directorate of National Consumer Rights Protection (DNCRP) are working to track down substandard diamonds in the local market.
