Key Takeaways
- India has officially defined a ‘diamond’ for the first time, specifying it as a natural mineral.
- The move aims to clearly separate natural diamonds from lab-grown ones for trade benefits and consumer clarity.
- It comes amid a 62% surge in lab-grown diamond imports and potential US tariffs.
India has taken a decisive step to protect its diamond industry by formally defining what constitutes a ‘diamond’. The new definition, notified on May 16, explicitly categorises a diamond as a natural mineral, a move set to distinguish it from lab-grown alternatives and secure crucial trade benefits.
What the New Diamond Definition Says
The commerce ministry’s notification states a diamond is a “natural mineral consisting essentially of pure carbon crystallized in the isometric (cubic) system with a hardness of 10 on the Mohs scale, a specific gravity of approximately 3.52, and a refractive index of 2.42”.
Clarity for Trade and Consumer Confidence
This definition is pivotal for implementing the India-UAE Comprehensive Economic Partnership Agreement (CEPA), which offers zero-duty access for Indian diamonds. Previously, the lack of a clear definition risked confusion and misuse of these duty benefits.
“The definition of diamond is a significant step for the industry. It will help in clearly distinguishing natural diamonds from lab-grown diamonds, which is crucial for consumer confidence and for availing benefits under trade agreements like CEPA,” said Vipul Shah, chairman of the Gem & Jewellery Export Promotion Council (GJEPC).
A commerce ministry official added that the notification “will ensure that only natural diamonds get the duty benefits.”
Addressing the Lab-Grown Diamond Surge and US Tariff Threat
The timing is critical. India’s imports of lab-grown diamonds (LGDs) jumped 62% to $1.7 billion in 2023-24. Concurrently, the US—the world’s largest diamond market—is reviewing tariffs on LGDs.
“If the US imposes tariffs on LGDs, it could impact India’s exports of these gems. Having a clear definition will help in proper classification and data collection, which is important for trade negotiations,” explained the commerce ministry official.
Industry Applauds Move to Level Playing Field
The industry has welcomed the decision, citing concerns that lab-grown stones were sometimes mis-sold as natural diamonds, damaging consumer trust.
“The definition is a welcome step. It will help in creating a level playing field for natural diamonds,” said Colin Shah, managing director of Kama Jewelry.
“Lab-grown diamonds are being passed off as natural diamonds in some cases… The definition will help in curbing such practices,” emphasised Vipul Shah of GJEPC.
Definition of ‘Cut and Polished Diamonds’ Also Included
The notification also defines “cut and polished diamonds” as processed stones regardless of origin (natural or lab-grown). This broader definition is intended to aid comprehensive data collection and policy-making for the entire diamond sector.
As the world’s largest diamond processor, accounting for 90% of global supply by volume, India’s new definitions are set to reshape trade dynamics and protect the legacy of its natural diamond industry.
