One of the unexpected victims of the Indian election season is the Indian diamond and jewellery industry. The reason is the model code of conduct that restricts transactions in excess of Rs 50,000 without apt documents. Even the angadias, traditional couriers involved in the diamond and gold trade, are inactive. According to Harish Soni, Chairman, All India Gem & Jewellery Traders’ Federation (AIGJF), “The main problem is mobility because both goods and money need to move to-and-fro in this industry. The onus is on the transporter, in several cases, the ‘angadias’ to prove that the cash is not being used for election canvassing. The person has to establish himself as a businessman and prove that the cash being carried has been generated by his business.” He said that they have been informing its members and the public of the documents that must be carried in transit. %% “What is happening is a hindrance to legitimate business. It is a case of high-handedness. The income tax officials are harassing the industry unnecessarily. Everyone is fully aware that the industry has huge cash and merchandise flow and these are an integral part of our business operations,” said Nilesh Gupta, Chairman, Administration Committee, India Bullion & Jewellery Association (IBJA). A diamond trader said officials were impounding cash and merchandise and telling traders to collect the same post-elections. %% According to Vipul Shah, Chairman, Gem and Jewellery Export Promotion Council (GJEPC), “The timing is bad.” India's diamond traders are finding it hard to take advantage of falling rough diamond prices, which would normally translate into better margins. Gujarat, and particularly Surat, is a global hub for the cutting and polishing of roughs that are then sold in global markets. "In the last two weeks, rough prices have dropped by 3-4%," added Shah. %% "In rural Gujarat, diamond business takes place only via cash. But now people have to show documents to I-T officials for any transaction worth more than Rs 50,000. That is creating problems for traders in local market as the documents they carry sometimes fail to satisfy officials. That is creating a lot of problems for traders in the local market as the documents they are carrying sometimes fail to satisfy the I-T officials. This has impacted the business in the local market and sales have fallen. The code has had a dampening effect on the trade nationwide as well," said Dinesh Navadia, president, Surat Diamond Association. %% People in the trade are being harassed by I-T officials. The rigorous procedure involved in the process is creating a lot of mental pressure on the trade. Inter-state movement of diamonds is also becoming difficult. Our factories are in Gujarat and we have to send rough diamonds to the factories for cutting and polishing. On the other hand, the traders aren't quite sure whether they are erring too much on the side of caution. It is not yet clear to us whether diamond transactions also fall under the 50,000 bracket, Shah added. GJEPC officials plan to meet KV Chaudhary, member of the Central Board of Direct Taxes or CBDT, to get a clearer picture. "We will request him to keep diamonds out of the purview of the model code of conduct," said Pankaj Parekh, vice-chairman, GJEPC.