India set to Challenge Dubai, Antwerp with Foreign Tax Exemption

(IDEX Online) - India's lower house of Parliament today (6 August) passed a Bill proposing a 15-year income-tax exemption for certain foreign companies selling qualifying rough diamonds through notified Special Notified Zones in Mumbai and Surat.

The measure aims to make India more attractive as a global rough-diamond trading center and to challenger the dominance of Dubai and Antwerp.

The proposed exemption would apply from 1 October 2026 to 31 March 2041, but must be approved by the upper house and receive presidential assent.

No date has yet been set for a hearing in the upper house, but there is widespread optimism that the Bill will pass.

Eligible companies would include foreign diamond-mining companies, sightholders, brokers, aggregators and tender or auction entities connected with the rough-diamond trade.

The diamonds would need to meet the statutory definition of rough diamonds and be accompanied by a Kimberley Process Certificate.

If enacted, the measure could help Indian cutting and polishing companies -particularly small and medium-sized businesses - gain faster and more direct access to rough diamonds from mining companies and sightholders.

It may also encourage more suppliers, tenders and auctions to operate in India, potentially reducing travel and intermediary costs and shortening procurement cycles.

The Taxation and Other Laws (Amendment) Bill, 2026, includes broader package of tax changes covering foreign investment, electronics manufacturing, data centers, offshore funds and payment systems.

It does not provide a general tax exemption for Indian cutters, polishers, jewelry manufacturers or retailers.