India slashed import duty on cut and polished diamonds to 5% from 7.5% earlier, Finance Minister Nirmala Sitharaman said on Tuesday.

The South Asian country is the world's biggest importer of rough diamonds and exports the precious stones after processing.

"Reduction in import duty on cut & polished diamonds to 5% will further help in strengthening the sector and retain its leadership position," Colin Shah, chairman of the Gems and Jewellery Export Promotion Council (GJEPC) said in a statement.

(Reporting by Rajendra Jadhav, Editing by Louise Heavens)