Mumbai's octroi (a local tax on consumer goods brought into a district) on diamonds will be slashed from 2% to 0.01% this next fiscal year, Art of Jewellery Magazine reports.

Commissioner Subodh Kumar of the Brihanmumbai Municipal Corporation announced the decision on the diamond octroi, noting that many diamond traders weren't paying the levy and others were relocating out of Mumbai, resulting in a revenue loss for the city.

Kumar said that even though the rate would be greatly reduced, more people would pay it and the municipality expected octroi revenue from diamonds to increase from $442,000 to $1.98 million.