India has introduced a 15-year tax exemption for overseas rough diamond sellers in a move to strengthen its bid to become a global diamond trading centre, potentially transforming the international rough diamond market.
India has moved to lock in a long-term tax incentive for overseas rough diamond sellers, a step that industry leaders say could deepen the country’s bid to become a global trading centre for the stone. The new law grants a 15-year tax exemption for foreign companies selling rough diamonds in special notified zones, with the measure set to begin on 1 October and run until 31 March 2041.
According to the Gem and Jewellery Export Promotion Council, the exemption can be used by miners, brokers, aggregators, tender operators, auction houses and sightholders, the buyers tied to De Beers’ supply system. The relief applies only when sales take place inside approved zones such as those at Mumbai’s Bharat Diamond Bourse and Surat Diamond Bourse, and companies must provide information when requested. The bill also means proceeds from those rough sales will not be counted in taxable income for the year. Earlier this year, the Central Board of Direct Taxes issued a circular setting out safe-harbour rules for foreign companies selling raw diamonds in SNZs, including a minimum profit declaration of 4% of gross receipts.
Kirit Bhansali, chairman of the GJEPC, called the law a turning point for the industry, arguing that India already does most of the world’s cutting and polishing but has lacked certainty in rough trading rules. The council has been pressing for such changes for years. In 2020, it urged the government to amend tax rules so overseas mining companies could sell directly in SNZs, even suggesting a presumptive turnover tax rate to make the market easier for foreign sellers to use.
The policy push is also tied to India’s wider effort to reduce dependence on intermediaries and draw more direct rough diamond trade into the country. In 2015, the government had already loosened rules on rough diamond imports and trading in an attempt to strengthen India’s position as a hub. More recently, in August 2025, the Directorate General of Foreign Trade widened access to Diamond Imprest Authorisation, allowing some high-performing exporters to import natural cut and polished diamonds up to 5% of average annual export performance, subject to a cap of $15 million.
The new law arrives as India courts producer countries more actively. After the bill was enacted, a senior government delegation from Namibia visited India to discuss direct diamond trade, and the GJEPC said talks were under way on a memorandum of understanding with the southern African country. Anoop Mehta, a convenor on the council’s diamond panel, said the change should especially help small and medium-sized manufacturers by giving them more direct access to rough diamonds without the added cost and complexity of sourcing overseas.
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