The Gem and Jewellery Export Promotion Council (GJEPC) warmly welcomes the introduction of the Taxation and Other Laws (Amendment) Bill, 2026 in the Lok Sabha on 4 August. The insertion of entry 13F in Schedule IV to the Income-tax Act 2025, providing a full income tax exemption on income from sale of rough diamonds by eligible foreign companies engaged in the rough diamond trade through Special Notified Zones with effect from 1 October 2026 and up to 31 March 2041, is a transformative and historic intervention that GJEPC has long advocated for.

Commenting on the development, Shri Kirit Bhansali, Chairman, GJEPC, said: "This is a defining moment for India's diamond industry. For years, the one thing holding us back from becoming a global rough diamond trading hub was not capability or capacity — it was certainty. A 15-year statutory exemption removes that doubt entirely. This was a long-standing demand of the Council to enable our small and medium-sized diamond manufacturers to directly source rough diamonds from global mining companies, auctioneers and traders, while enjoying a tax framework comparable to that of other leading rough diamond trading centres across the world. We are confident that this measure will enable India to emerge as a global powerhouse in rough diamond trading."

“We are deeply grateful to the Hon'ble Prime Minister and the Hon'ble Finance Minister for recognising what this industry needed and acting on it decisively." Kirit Bhansali added.

This measure directly addresses the single most critical barrier to positioning India as a global rough diamond trading hub, being the absence of a competitive and certain income tax framework for eligible foreign companies engaged in the rough diamond trade, including foreign mining companies, their sightholders, brokers, aggregators and tender and auction entities, participating in India's Special Notified Zones. By providing a full statutory exemption for 15 years, the dispensation is now equivalent to that available in competing international diamond trading jurisdictions, and the Government has sent an unambiguous signal of long-term commitment to the diamond trade that will resonate strongly with international participants across the globe.

GJEPC particularly welcomes the expansion of eligible entities to cover the full spectrum of participants in the rough diamond trade, including foreign mining companies, their sightholders, brokers, aggregators and tender and auction entities. This expansion is critical to building liquidity and depth in India's SNZ framework. The rough diamond trade is not conducted exclusively through mining companies and the inclusion of the broader ecosystem of trading intermediaries is essential for India to compete with established hubs. We also note with particular appreciation that the definition of rough diamond in Note 5 covers all forms of rough diamonds, whether unworked, sawn, cleaved or bruted, and critically does not carry any restriction on sorted or assorted diamonds, thereby aligning the statutory definition with the full spectrum of commercial rough diamond trading activity as it actually occurs in practice. This means that diamonds across all stages of primary processing, including sorted and assorted parcels, fall within the scope of the exemption, removing a long-standing source of uncertainty for the trade.

GJEPC calls upon CBDT to swiftly prescribe the form and manner of information to be maintained and furnished by eligible foreign companies under the exemption conditions, well before the 1 October 2026 effective date, and to ensure that the compliance framework is simple, clear and operationally workable for international participants unfamiliar with Indian regulatory procedures.

We also look forward to consequential amendments to Para 4.49 of the Foreign Trade Policy 2023 to align the eligible entity framework on the trade side with the expanded participant universe now recognised under this income tax exemption, and to corresponding amendments to Customs Circulars 17/2015 and 36/2019 governing the Special Notified Zones at Bharat Diamond Bourse Mumbai and Gem and Jewellery Hub Surat.

GJEPC expresses its deep gratitude to the Hon'ble Prime Minister, the Hon'ble Finance Minister, the Department of Commerce, the Ministry of Finance and the Central Board of Direct Taxes for their sustained engagement with the industry and their unwavering commitment to making India a world-class destination for rough diamond trading. This Bill marks the beginning of a new chapter for India's diamond ecosystem and we stand ready to work with all stakeholders to ensure its swift and effective implementation.

Courtesy: AOJ DESK NEWS