India has proposed extending a 15-year tax exemption for foreign companies selling rough diamonds in special notified zones, aiming to attract international sellers and bolster its position as a global diamond trading and manufacturing centre.
India has moved to widen tax relief for the global rough diamond trade, tabling legislation that would grant a 15-year exemption to foreign companies selling rough stones in special notified zones, according to Rapaport. The proposal is aimed at miners, brokers, aggregators, tender and auction operators and sightholders, the contract customers of De Beers, as New Delhi seeks to strengthen its position as a trading centre as well as the world’s largest diamond manufacturing hub.
Under the bill, proceeds from qualifying rough sales would not be counted in the income base used to calculate tax liability, provided the transactions take place in a special notified zone such as the Bharat Diamond Bourse in Mumbai or the Surat Diamond Bourse. Rapaport reported that the measure would run from October 1 this year until March 31, 2041, but still requires approval in parliament’s lower house before it can become law.
The latest plan builds on earlier changes meant to draw more international sellers into India’s diamond hubs. In 2015, the government said display of uncut stones inside special notified zones would not attract income tax, while the Gem and Jewellery Export Promotion Council later pressed for broader relief so foreign miners could sell directly in India. The council has also backed a safe-harbour regime introduced in recent years, which set a presumed profit margin for overseas mining companies trading rough diamonds in these zones.
Industry figures argue the new proposal could reduce the need to route rough stones through Dubai or Antwerp and make India a more attractive place for direct sales. Pranay Narvekar, an India-based analyst at Pharos Beam Consulting, told Rapaport the change would streamline operations and cut unnecessary movement of rough. Sabyasachi Ray, executive director of the GJEPC, said corporate income tax can reach 33% after surcharges and welcomed the move as a step that could help India become a stronger centre for rough-diamond trading.
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