India’s diamond industry has received one of its most important policy signals in years. On 4 August 2026, the Taxation and Other Laws (Amendment) Bill, 2026 was introduced in the Lok Sabha with a proposal designed to attract more international rough-diamond trading into India. The measure offers eligible foreign companies a full income-tax exemption on income earned from selling rough diamonds through approved Special Notified Zones, or SNZs.
If enacted and implemented as proposed, the exemption would apply from 1 October 2026 until 31 March 2041. That long 15-year window matters because global miners, auction houses, brokers and tender operators need predictable rules before committing inventory, teams and capital to a trading centre.
What exactly is changing?
The proposal is focused and specific. It does not provide a general tax exemption to every diamond business. It applies to eligible foreign participants selling rough diamonds through India’s notified zones. According to the Gem & Jewellery Export Promotion Council, the eligible group is intended to include foreign mining companies, sightholders, brokers, aggregators, and tender and auction entities.
The definition is also commercially significant. It covers rough diamonds that are unworked, sawn, cleaved or bruted, including sorted and assorted parcels. In practical terms, this is meant to reflect how rough is actually prepared and traded rather than limiting the benefit to a narrow type of parcel.
Why Surat could gain the most
India already has extraordinary strength in cutting, polishing, jewellery manufacturing and skilled craftsmanship. Yet much of the international sale of rough diamonds has historically taken place through overseas hubs. A clearer tax framework could encourage global suppliers to present and sell more parcels directly in India’s SNZs at Bharat Diamond Bourse in Mumbai and the Gem & Jewellery Hub in Surat.
That could be especially valuable for small and medium-sized manufacturers. Direct access to miners, authorised sellers and transparent auctions may reduce the need for costly overseas sourcing trips, widen the choice of available parcels and shorten the route between supply and manufacturing. It may also bring more price discovery, inspection, logistics, compliance and financing activity into India.
The scale of the opportunity is substantial. GJEPC reports that India imported 106.09 million carats of rough diamonds worth US$11.07 billion in 2025, representing 40.24% of global rough imports by volume and 43.25% by value. India is therefore not trying to create demand from nothing; it is trying to bring more of the trading activity closer to the world’s largest rough-importing and processing ecosystem.
A new route for producer countries
The policy has already attracted international attention. On 11 August 2026, a senior Namibian delegation visited GJEPC, Bharat Diamond Bourse and the Indian Diamond Trading Centre to explore closer trade with India. Namibia produced 2.09 million carats worth US$721.4 million in 2025 and is recognised for high-value rough. Its interest shows how India’s manufacturing scale and a more certain tax environment could complement diamond-producing nations seeking direct access to buyers.
Will jewellery prices fall immediately?
Not necessarily. Rough-diamond prices are influenced by mine production, global demand, exchange rates, polished inventory, financing and the quality and size of each stone. Tax certainty can improve market access and efficiency, but it does not guarantee an instant reduction in retail jewellery prices. The industry is also navigating uneven natural-diamond demand, geopolitical uncertainty and changing consumer preferences.
It is equally important to distinguish natural rough diamonds from lab-grown diamonds. They are separate supply chains with different production economics. The proposed exemption concerns rough diamonds sold through the notified trading framework; it should not be presented as a direct price policy for lab-grown diamond jewellery.
What happens next?
The Bill still requires completion of the legislative process, followed by detailed compliance rules and related updates to trade and customs procedures. Industry participants will be watching for clear documentation requirements before the proposed 1 October start.
For Surat, however, the direction is unmistakable. India already transforms rough into globally admired polished diamonds and jewellery. By bringing more sourcing and trading closer to that expertise, the country could strengthen its position across the complete diamond value chain. At Raisoni Jauharis, we see this as a reminder that the future of jewellery will be shaped by transparent sourcing, skilled manufacturing and better-informed customers.
