Executive Summary:
The Ministry of Commerce and Industry addressed concerns in Lok Sabha regarding a decline in diamond import and export in 2024-25 compared to 2023-24. The decline is attributed to decreased global demand due to geopolitical conflicts, G7 sanctions on Russian diamonds, and traceability challenges. The Department of Commerce (DoC) is implementing multifaceted strategies, including engaging with G7, exploring new markets, supporting R&D for Lab Grown Diamonds (LGDs), and implementing the Diamond Imprest Authorization scheme.
Key Points / Main Content:
* **Decline in Diamond Trade:**
* Both diamond exports and imports decreased in 2024-25 compared to 2023-24.
* Global cut and polished diamond exports fell from USD 75.68 billion in 2023 to USD 54.77 billion in 2024.
* **Reasons for Decline:**
* Reduced consumer demand for luxury items due to geopolitical conflicts in Ukraine and West Asia.
* G7 sanctions on Russian diamonds and traceability issues for non-Russian diamonds.
* **Government Measures:**
* Engaging with G7 to protect India's diamond industry, resulting in:
* Full traceability scheme shifted from March 1, 2025, to January 1, 2026.
* 'Grandfathering of diamonds' permitted for diamonds entering G7/EU before sanctions.
* Exemption of jewellery studded with Russian diamonds processed in 3rd countries.
* Exploring new markets and sustaining exports in existing markets.
* R&D project awarded to IIT-Madras with an outlay of Rs. 242.96 Cr over 5 years for indigenous manufacturing of CVD and HPHT systems to expand the LGD business.
* Removal of IGCR condition for customs duty exemption on import of seeds used in rough LGD manufacturing.
* Extension of duty-free import of LGD seeds up to March 31, 2026.
* Safe Harbour Rates (SHR) notified in November 2024 for the sale of rough diamonds in Special Notified Zones (SNZs) by foreign mining companies (FMC).
* Implementation of Diamond Imprest Authorization scheme from April 1, 2025, for duty-free import of natural cut and polished diamonds (less than one-fourth carat).
Impact Analysis:
* **Diamond Industry Stakeholders:**
* *Impact:* Affected by declining exports and imports, sanctions, and changing market dynamics.
* *Action Required:* Adapt to new regulations, explore new markets, and leverage government support for LGD development.
* **Foreign Mining Companies (FMC):**
* *Impact:* Benefit from Safe Harbour Rates for direct sales in Special Notified Zones.
* *Action Required:* Utilize SNZs for direct sales to Indian entities.
* **Lab Grown Diamond (LGD) Manufacturers:**
* *Impact:* Beneficiaries of R&D support, duty-free import of seeds, and government initiatives to promote LGD business.
* *Action Required:* Leverage R&D support and duty exemptions to expand LGD manufacturing.
* **G7 and EU Countries:**
* *Impact:* Involved in implementing and adjusting sanctions on Russian diamonds.
* *Action Required:* Adhere to adjusted timelines and exemptions for diamond traceability and sanctions.
Key Entities Referenced
MR PATHAN YUSUF: Member of LOK SABHA who raised the question about the decline in diamond import and export.
JITIN PRASADA: Minister of State in the Ministry of Commerce and Industry who provided the answer to the LOK SABHA question.
Ukraine: Country where geopolitical conflicts have contributed to a decline in global consumer demand for luxury items, including diamonds.
West Asia: Region where geopolitical conflicts have contributed to a decline in global consumer demand for luxury items, including diamonds.
G7: Group of seven countries that have imposed sanctions on Russian diamonds, impacting diamond trade.
European Union: A political and economic alliance of countries, referred to alongside the G7 in the context of sanctions on Russian diamonds and their impact on diamond trade.
Department of Commerce: The Indian governmental department implementing strategies to address declining diamond exports and imports.
IITMadras: Indian Institute of Technology Madras, which was awarded an R&D project by the Department of Commerce for indigenous manufacturing of CVD and HPHT systems.
GOVERNMENT OF INDIA
MINISTRY OF COMMERCE AND INDUSTRY
DEPARTMENT OF COMMERCE
LOK SABHA
UNSTARRED QUESTION NO. 2607
ANSWERED ON 05/08/2025
DECLINE IN DIAMOND IMPORT AND EXPORT
2607. MR PATHAN YUSUF:
Will the Minister of COMMERCE AND INDUSTRY (वाणिज्य एवं उद्योग मंत्री) be pleased to
state:
(a) whether the Government is aware of the sharp decline in diamond import and export
in the country;
(b) if so, the details thereof, year-wise;
(c) the reasons behind this downfall and the steps taken by the Government is taking to
support the diamond industry;
(d) the number of jobs that have been lost in the diamond industry due to factory closures
and defaults; and
(e) the measures being taken to support displaced workers and ensure their re-
employment?
ANSWER
वाणिज्य एवं उद्योग मंत्रालय में राज्यमंत्री (श्री णिणिन प्रसाद)
THE MINISTER OF STATE IN THE MINISTRY OF COMMERCE AND INDUSTRY
(SHRI JITIN PRASADA)
(a), (b) & (c) Export and Import of diamonds have declined in 2024-25 as compared to 2023-
24.
Cut and Polished
Values in USD Rough Diamonds Diamonds Total
million 2023-24 2024-25 2023-24 2024-25 2023-24 2024-25
Export 1,003.06 566.66 17,367.60 14,527.61 18,370.66 15,094.27
Import 15,511.78 11,376.18 7,483.74 5,814.43 22,995.52 17,190.61
Source: DGCI&S
*Diamond includes HS 7102 (Natural diamonds), HS 7104 21 and HS 7104 91(Laboratory-
grown diamonds)
1The consumer demand for luxury items has generally declined across the world due to
effects of geopolitical conflicts in Ukraine and West Asia. Diamond being a luxury item has
also seen a decline in consumer demand in India’s export destinations. G7 sanctions on
Russian diamonds and the challenge of the identification and traceability of non-Russian
diamonds by the importing G7 and EU countries have also impacted diamond trade. The
global exports of cut and polished diamonds have declined significantly from USD 75.68
billion in 2023 to USD 54.77 billion in 2024.
In response, Department of Commerce (DoC) is implementing multifaceted strategies to
comprehensively address declining exports and imports. These include:
1. DoC has been engaging with the G7 to protect India’s diamond industry following
G7 sanctions on Russian diamonds. As a result, following has been achieved:
(i) Full-traceability scheme was shifted from 01 March 2025 to 01 January 2026.
(ii) 'Grandfathering of diamonds' was permitted for diamonds that entered G7/EU
before sanctions.
(iii) Jewellery Studded with Russian diamonds processed in 3rd Countries was
exempted from the purview of sanctions.
2. DoC in tandem with industry stakeholders is undertaking initiatives to explore new
markets, while sustaining export of diamond in existing major markets.
3. DoC has awarded an R & D project to IIT-Madras in 2023-24 with an outlay of Rs.
242.96 Cr over 5 years for indigenous manufacturing of both Chemical Vapour
Deposition (CVD) and High Pressure and High Temperature (HPHT) systems along with
the recipes for expanding the Lab Grown Diamond (LGD) business.
4. The Customs (Import of Goods at Concessional Rate of Duty or For Specific End Use)
Rules, 2022 (IGCR) condition for customs duty exemption on import of seeds used in rough
Lab-Grown Diamond manufacturing has been removed. Further, duty free import of LGD
seeds extended upto 31.03.2026.
5. Safe Harbour Rates (SHR) for sale of rough diamonds in Special Notified Zones
(SNZs) by foreign mining companies (FMC) was notified in November 2024 to enhance
direct sales of rough diamond by foreign mining companies to Indian entities.
6. Diamond Imprest Authorization scheme has been implemented from April 1, 2025 for duty
free import of natural cut and polished diamonds, of less than one-fourth carat, thereby
promoting value addition and exports.
(d) & (e) Department of Commerce does not maintain such data.
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