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India Launches DIA Scheme to Boost Global Diamond Industry Position
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India Launches DIA Scheme to Boost Global Diamond Industry Position
In a strategic move to bolster India’s leadership in the global diamond industry, the Department of Commerce announced the launch of the Diamond Imprest Authorization (DIA) Scheme on Tuesday.
The scheme, which is set to come into effect in April, aims to revitalize the diamond sector, which has been grappling with declining exports and job losses. It will provide targeted incentives to exporters while ensuring the protection of domestic interests.
The DIA Scheme permits the duty-free import of natural cut and polished diamonds of less than ¼ carat (25 cents), provided that exporters meet a value addition requirement of at least 10%, according to a press statement from the commerce ministry.
The scheme is designed to benefit only two-star export houses and above, with annual export revenues exceeding $15 million. A two-star export house refers to businesses that achieve at least $15 million in exports annually, as outlined by the ministry.
This initiative aligns with global beneficiation practices, following the model of diamond-rich nations such as Botswana, Namibia, and Angola, where local processing is mandatory. India, the world's dominant player in diamond processing, handles 90% of global diamond processing. However, rising competition from mining countries, combined with increasing costs and global economic uncertainties, has put pressure on the sector.
The DIA Scheme addresses these challenges by ensuring that Indian diamantaires remain competitive, preventing the need to relocate operations abroad. The scheme is expected to provide a level playing field for Indian exporters, safeguarding their position as global leaders.
Industry experts have praised the scheme for its potential to transform the diamond sector. Vipul Shah, Chairman of the Gem and Jewellery Export Promotion Council (GJEPC), commented, “The DIA scheme has the potential to significantly reduce input costs and drive innovation in cutting and polishing techniques, which will benefit the industry at large."
He added, “This is a bold step that supports MSME exporters and sends a clear message to the world about India’s commitment to maintaining its leadership in the global diamond trade.”
The initiative is also expected to stimulate job creation across the diamond industry’s value chain, from artisans to processing units, offering much-needed relief in this labour-intensive sector.
India is a major exporter of gems and jewellery, with key markets including the United States, Hong Kong, and the UAE. However, the sector experienced a decline in exports in FY24, reaching a three-year low. According to data from the Commerce Ministry’s Niryat portal, exports of gems and jewellery stood at $32.71 billion in FY24, down from $37.96 billion in FY23 and $38.94 billion in FY22.
Despite the drop in exports, the Gems and Jewellery Export Promotion Council (GJEPC) had set an ambitious export target of $40 billion for FY24, supported by strong sales to the UAE.
India imports rough diamonds since it does not produce them in significant quantities, but it remains a key player in adding value through cutting, polishing, and export. The DIA Scheme represents a concerted effort to safeguard and elevate India's position in the global diamond industry, fostering innovation and growth in this vital sector.