Tax break for diamond industry boosts India’s global diamond trade position

The Story in Brief

India moved closer to becoming a global rough diamond trading hub after the government added a provision to the Taxation and Other Laws (Amendment) Bill, 2026, granting a 15‑year income tax exemption to eligible foreign companies trading rough diamonds through Special Notified Zones (SNZs). The amendment exempts income from sales through SNZs from October 1, 2026, to March 31, 2041. The Gem and Jewellery Export Promotion Council (GJEPC) welcomed the change; chairman Kirit Bhansali said it gives the certainty global players sought. The measure aims to let manufacturers source rough stones directly from global miners, auctions and traders under a tax regime comparable to centres. It widens eligible participants to include sightholders, brokers, aggregators and auction and tender entities, and defines rough diamonds to cover all forms, including unworked, sawn, cleaved or bruted stones. Industry has asked the Central Board of Direct Taxes to notify compliance rules before October 1, 2026, and sought matching changes to the Foreign Trade Policy and customs rules at Bharat Diamond Bourse and Surat Gem and Jewellery Hub.

The Indian Opinion

Industry descriptions calling the amendment a “defining moment” and suggesting the exemption removes all doubt are optimistic. A 15‑year tax holiday improves competitive appeal, but whether global miners and traders relocate trading to India will depend on the final compliance rules, timely amendments to the Foreign Trade Policy and customs regulations, and practical implementation at the Bharat Diamond Bourse and Surat hub. The widened participant list and clearer definition of rough diamonds may help liquidity, yet claims about a rapid shift in global trade are not guaranteed. The outcome will hinge on regulatory detail, enforcement and market response.

Original article: A tax break puts India on global diamond map (economictimes.indiatimes.com)

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