India's Ministry of Commerce and Industry is launching the Diamond Import Authorization scheme on April 1, 2025, allowing duty-free imports of natural cut and polished diamonds under 1/4 carat. The initiative targets exporters with Two Star status or higher and requires minimum annual exports of USD 15 million. This strategic move aims to boost export growth, support MSMEs, and revitalize India's diamond industry as it creates new employment opportunities. The scheme's extensive impact promises significant transformation of India's role in global diamond trade.

Main Highlights

• India launches Diamond Import Authorization scheme on April 1, 2025, allowing duty-free imports of natural cut diamonds under 1/4 carat.
• The scheme targets Two Star Export House status holders with minimum annual exports of USD 15 million.
• Exporters receive comprehensive tax exemptions on Basic Customs Duty and Additional Customs Duty, significantly reducing operational costs.
• DIA scheme aims to boost export growth, prevent investment migration, and address recent declining trends in the diamond sector.
• Program supports MSMEs and requires 10% value addition, ensuring meaningful contribution to India's diamond industry growth.

India has unveiled a groundbreaking diamond import scheme that promises to redefine its dominant position in the global diamond industry. The Diamond Import Authorization (DIA) Scheme, set to launch on April 1, 2025, will allow duty-free imports of natural cut and polished diamonds smaller than 1/4 carat, targeting significant export growth and industry revitalization. The scheme provides comprehensive support for diamond sector MSMEs seeking to enhance their market presence.

The initiative particularly caters to diamond exporters who hold Two Star Export House status or higher and maintain annual exports of at least USD 15 million. These participants must fulfill export obligations with a minimum value addition of 10%, guaranteeing meaningful contribution to India's diamond industry growth as it maintains quality standards. The Department of Commerce introduced this scheme to ensure substantial domestic processing activity. The scheme is formally titled as Diamond Imprest Authorisation by the Ministry of Commerce and Industry.

Drawing inspiration from successful beneficiation policies implemented in diamond-producing nations like Botswana, Namibia, and Angola, the DIA Scheme aims to create a more equitable competitive environment. This strategic move is especially beneficial for micro, small, and medium enterprises, providing them with improved opportunities to compete effectively in the global market. As the world's largest processing center, India's diamond trade represents 90% of global cutting and polishing operations. The city of Surat hub stands as the cornerstone of India's diamond processing capabilities, transforming raw stones into refined jewels.

The scheme's thorough tax exemptions cover various duties, including Basic Customs Duty, Additional Customs Duty, and several other charges, significantly reducing operational costs for qualifying exporters. This financial relief is expected to generate additional employment opportunities, particularly for diamond assorters and workers involved in processing semi-finished diamonds.

A key objective of the DIA Scheme is to prevent the migration of investments to diamond-mining countries while preserving India's vital position across the diamond value chain. The timing is especially significant as it addresses recent declining trends in exports and workforce reductions within the sector, offering a practical solution to these challenges.

The initiative aligns with international standards and practices, improving India's ease of doing business in the global diamond trade. By streamlining processes for duty-free diamond imports, the scheme supports the broader vision of broadening India's export footprint in the global jewelry market through innovation and inclusivity.

Industry experts anticipate that this strategic move will help consolidate India's position in the global diamond industry while protecting domestic processors. The scheme's structure guarantees that benefits reach targeted beneficiaries while maintaining industry standards and competitive advantages.

As the implementation date approaches, the diamond sector is preparing for a significant transformation that promises to redefine India's role in the global diamond trade as it nurtures sustainable growth and employment opportunities.

Frequently Asked Questions

How Will Small-Scale DIAmond Manufacturers Benefit From the New DIA Scheme?

Like Mumbai's local diamond cutters, small-scale manufacturers gain competitive advantage through duty-free imports, simplified operations, and targeted export support, nurturing sustainable small-scale growth in the diamond sector.

What Documentation Is Required for Participating in Duty-Free Diamond Imports?

Required documentation for duty-free diamond imports includes IEC registration, purchase orders, commercial invoices, bills of lading, certificates of origin, customs declarations, and pre-shipment inspection certificates from approved agencies.

Can Foreign Diamond Companies Establish Operations Under This New Policy?

With $15 million minimum annual export requirements, foreign diamond companies can establish operations through Special Notified Zones under industry regulations, leveraging safe harbor rules to facilitate foreign investment in diamond trading.

Will the Scheme Affect Diamond Pricing for Domestic Jewelry Manufacturers?

The scheme's indirect effects on diamond pricing may be minimal for domestic jewelry manufacturers, though increased market competition and availability of smaller diamonds could marginally influence costs over time.

How Does India Plan to Prevent Misuse of Duty-Free Diamond Imports?

Misuse prevention includes strict eligibility criteria for Two Star Export Houses, minimum export requirements, and regulatory measures like value addition mandates, six-month export obligations, and import value caps.