New Delhi: One sector at least would appear to have given finance minister Chidambaram an emphatic thumbs up sign would be the gems and jewellery sector, after the finance minister slashed import duty on several categories of stones. A CNBC-TV18 special to domain-b.

New provisions would reduce duty on cut and polished diamonds to 3 per cent from 5 per cent, rough synthetic stones to 5 per cent from 12.5 per cent and raw corals to 10 per cent from 30 per cent. Chidambaram''s proposals come in the face of increased competition to the country''s traditional diamond cutting and polishing business from a number of minig countries.

The proposals are designed to promote India as a trading hub for polished diamonds.

Analysts held back full praise, however, saying that the intended cuts would primarily benefit the domestic industry and not the export market. They also opined that ideally duty should be brought down to zero levels if India is to make its mark as a polished-diamond trading center. According to industry observers, zero duty would have offset some of the pricing pressure that comes from sourcing natural diamonds from around the world.

But the cuts have been welcomed by the industry as a move in the right direction, as it is felt that it will help the industry grow, and add to the employment opportunities.