Toespraak

25-04-2017

Opening HRD building Antwerp-Mumbai

April 25th, 2017, Mumbai - India


- - -  the spoken word alone prevails - - -

[Introduction]

Excellences, Ladies and Gentlemen,

Good afternoon, thank you for that generous introduction, and welcome to the official inauguration of the new offices of HRD Antwerp – Mumbai. Speaking on behalf of the Belgian federal Government, we are very pleased to be here in Mumbai, to recognize yet another milestone signifying the excellent trade relations between our two countries. My two previous visits to India as Secretary of State for Foreign Trade both led to new contacts, interesting meetings, and above all new trade opportunities. I am convinced that this current visit will be no exception and will also lead to new forms of cooperation.

And of course, thanks to Brussels Airlines’ new direct service between Zaventem and Mumbai, it was very easy to get here.

 

Excellences, Ladies and Gentlemen,

I would like to thank several people and organizations in particular for joining us on this most promising occasion. Mr. Peter Huyghebaert, Consul General to the Kingdom of Belgium, our hosts from HRD Antwerp, HRD Antwerp-India and the Antwerp World Diamond Center, the representatives of Swift India who have facilitated the presentation you will hear shortly, and the members of the Indian diamond trade and banking sector who have joined us here today.

Excellences, Ladies and Gentlemen,

As you well know, the diamond industry is extremely valuable to both our countries. In India, it is responsible for a million jobs, and in Belgium it creates employment for some 32,000 people, a substantial number in a rather small country like ours. 

Furthermore, diamond trade accounts for 15% of all Belgian exports to India and 4% of Belgian exports in total. India is the largest market for rough diamonds exported from Belgium, and is the largest supplier of polished diamonds to Antwerp in terms of volume. More than 80% of the value of all Belgian exports to India is created by diamond exports, amounting to a total of EUR 8,15 billion. Diamonds also represent 40% of all Indian goods imported to Belgium, with a total value of EUR 2,3 billion. So I believe I can say with confidence that of all the trade flows across the global diamond industry as a whole, those between India and Belgium are by far the most significant.

 

All of which goes to show that Belgium, being the world’s largest diamond trade center, and India, being the world’s biggest diamond manufacturer, are privileged partners in diamond trade. We depend on one another, and while we play different roles in the diamond value chain, these roles are of equal importance and deserve equal respect.

Yet, despite these very close ties, the trade in polished diamonds has been affected  by the import duties levied by India. These used to be zero, but were then raised to 2% in 2012 and 2,5% in 2014. The announcement of this measure in 2011 led to a sudden and sharp drop in Belgian exports of polished diamonds to India: 75% in volume (carats) and 70% in value. Ever since, exports have not adapted well to this new reality. The initial objective of this import tariff was to counter an illegitimate practice called round-tripping, a practice that I, and the Belgian diamond industry, strongly condemn. However, the 2,5% tariff applied to all polished diamond imports not only affects companies participating in these illegitimate practices, it also hurts the entire legitimate trade, affecting those that adhere to the strictest standards of compliance.

 

Furthermore, I am convinced that other measures could tackle the round-tripping issue in a more targeted way, if this issue indeed still exists.

Import tariffs are an unnecessary burden on the diamond industry, which is still recovering from a very perilous period in the global economy, and will face existential challenges in the near future. So I would like to call upon the Indian authorities to move towards the abolition of this import tariff. That having been said, we very much welcome the fact that India has created exemptions and ask the Government to implement these exemptions in a fashion that guarantees legal certainty for companies enjoying the exemptions and to reduce other, non-tariff barriers.

 

The Belgian Government will of course also continue to do everything in its power to support the diamond industry. To this end, we were very pleased to have finally approved the Diamond Regime in 2016. This new fiscal regime taxes diamond companies on their turnover instead of their profit, and enhances stability and predictability for Belgian diamond traders. The Diamond Regime also has significant secondary effects.

For example, making inventory fiscally neutral will strengthen the balance sheets and increase the bankability of diamond traders. The Belgian Government will continue to monitor the results of this new regime, in order to further embed the diamond trade in our economic DNA. And we encourage Indian companies to get informed about the many advantages of the Diamond Regime for their business.

 

Finally, to HRD Antwerp and HRD Antwerp-Mumbai, I would like to congratulate you on your tremendous growth and commitment to excellence. These new offices are a marvelous example of international cooperation on a microscopic scale. They will help improve trade relations between the most important diamond trade centers in the world, and will facilitate the realization of the great potential of Europe’s finest diamond certification lab.

 

Thank you all for your attention,

 

 - - -  the spoken word alone prevails - - -

 


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