India Approves Landmark Tax Break to Boost Rough Trade

(IDEX Online) - India's parliament has passed a 15-year income tax exemption for foreign companies selling rough diamonds through its Special Notified Zones (SNZs).

The move is designed to transform India from the world's leading diamond cutting and polishing center into a full-scale global hub.

Legislation was passed by India's lower house on 6 August and received full approval from the upper house on 10 August. The 15-year rough diamond tax exemption is set to run from 1 October 2026 to 31 March 2041.

Industry leaders have long argued that tax uncertainty deterred global miners and major traders from using India as a rough trading base, despite the country's manufacturing dominance.

The Gem and Jewellery Export Promotion Council (GJEPC) welcomed it as a "landmark" reform that can shift India beyond its established role as a manufacturing hub and develop it into a major global marketplace for rough diamonds.

The exemption could unlock several billion dollars in additional rough diamond trade flowing through Indian SNZs in Mumbai and Surat, reducing the need for suppliers to show goods in India and then book sales in Dubai, Antwerp or elsewhere.

The amendment to the Income Tax Act grants a full tax exemption to eligible foreign miners, sightholders, brokers and auction entities on rough diamond sales made inside India's SNZs, subject to prescribed filings and Kimberley Process certification.