GJEPC Welcomes Tax Reform to Boost India’s Role in Rough Diamond Trade

Senior leadership from the Gem & Jewellery Export Promotion Council (GJEPC) met with Union Finance Minister Smt. Nirmala Sitharaman in New Delhi on 17 August to express appreciation for a significant tax reform aimed at strengthening India’s position in the international rough diamond market. The meeting underscored the industry’s support for policy measures that increase competitiveness, reduce tax-related uncertainty, and encourage global trade activity through India.

Key Representatives and Purpose of the Meeting

GJEPC Chairman Kirit Bhansali and Vice Chairman Shaunak Parikh, joined by K.K. Duggal, Director – Trade & Policy, thanked the Finance Minister for the recently enacted Taxation and Other Laws (Amendment) Bill, 2026. The delegation highlighted how the new law introduces a full income-tax exemption for eligible foreign companies that sell rough diamonds via India’s Special Notified Zones (SNZs). This engagement was aimed at acknowledging the reform and discussing its implications for industry stakeholders.

Details of the Tax Exemption

Under the enacted provision, eligible foreign entities will benefit from a complete income-tax exemption on income derived from the sale of rough diamonds conducted through designated SNZs. The exemption is set to take effect from 1 October 2026 and will remain in force until 31 March 2041, effectively providing a 15-year window of statutory tax certainty. This multi-year horizon is intended to give international businesses the confidence to plan and commit resources to India-based transactions.

Who Stands to Benefit

The reform covers a wide spectrum of global participants in the rough diamond ecosystem, including mining companies, sightholders, brokers, aggregators, and firms involved in diamond tenders and auctions. By reducing ambiguities around tax obligations, the measure aims to attract more direct trading activity to India, enabling international players to conduct rough diamond transactions with predictable tax treatment and greater operational certainty.

Strategic Importance for India’s Diamond Industry

India already commands a dominant share of the global diamond cutting and polishing industry. The new tax framework is viewed by GJEPC as a strategic enabler for India to expand its role beyond manufacturing and evolve into a major international marketplace for rough diamonds. Encouraging direct purchase and sale of rough stones in India could deepen the country’s integration into the upstream segments of the global value chain and create additional opportunities across related domestic sectors, including logistics, finance, and trade services.

Industry Perspective and Long-Term Impact

The Council has long advocated for greater tax certainty for overseas rough diamond traders. GJEPC regards the 15-year exemption as a potentially transformative policy that could rewrite market dynamics by drawing more global participants to transact through India. Greater trading volumes and increased international presence could translate to enhanced market liquidity, improved price discovery mechanisms, and the attraction of supporting services that together bolster India’s competitive positioning in the global gems and jewellery landscape.

Next Steps and Industry Engagement

During the meeting, GJEPC leadership extended an invitation to Finance Minister Smt. Sitharaman to attend the India Gems & Jewellery Award (IGJA) ceremony, reinforcing ongoing collaboration between policymakers and industry stakeholders. Moving forward, GJEPC expects to work closely with government authorities and market participants to ensure smooth implementation of the SNZ framework and to promote India as a preferred venue for rough diamond trading.

Outlook

With the new tax provisions in place, the industry anticipates a gradual shift of international rough diamond flows toward India. If implementation proceeds as intended, India could fortify its ambition to become a global hub not only for manufacturing but also for the trading of rough diamonds, thereby enhancing value creation across the country’s gems and jewellery sector.