The Gem and Jewellery Export Promotion Council (GJEPC) has welcomed the introduction of the Taxation and Other Laws (Amendment) Bill 2026, calling it a historic reform for India’s diamond industry. The proposed legislation introduces a 15-year income tax exemption for eligible foreign companies trading rough diamonds through Special Notified Zones, a move expected to strengthen India’s position as a global rough diamond trading hub while enhancing sourcing opportunities for the domestic diamond manufacturing sector.
Quick Summary
- GJEPC has welcomed the introduction of the Taxation and Other Laws (Amendment) Bill 2026.
- The Bill proposes a full income tax exemption for eligible foreign companies trading rough diamonds through Special Notified Zones.
- The exemption will be effective from 1 October 2026 to 31 March 2041.
- GJEPC says the reform removes a major barrier to India’s emergence as a global rough diamond trading hub.
- The Bill expands eligibility to include mining companies, sightholders, brokers, aggregators, and auction entities.
- GJEPC has requested timely compliance guidelines from CBDT and alignment with the Foreign Trade Policy and Customs framework.
Historic Tax Reform for India’s Rough Diamond Trade
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.
Chairman’s Statement on the Landmark Reform
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.”
Gratitude to the Government
“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.
Addressing the Biggest Challenge for India’s Diamond Industry
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.
Expansion of Eligible Participants Strengthens the SNZ Framework
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.
Call for a Simple and Practical Compliance Framework
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.
Alignment with Foreign Trade Policy and Customs Framework
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 Appreciation and Looks Ahead
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.
About The Gem and Jewellery Export Promotion Council (GJEPC)
The Gem & Jewellery Export Promotion Council (GJEPC), set up by the Ministry of Commerce, Government of India (GoI) in 1966, is one of several Export Promotion Councils (EPCs) launched by the Indian Government, to boost the country’s export thrust, when India’s post-Independence economy began making forays in the international markets. Since 1998, the GJEPC has been granted autonomous status. The GJEPC is the apex body of the gems & jewellery industry and today represents 11000+ members in the sector. With headquarters in Mumbai, GJEPC has Regional Offices in New Delhi, Kolkata, Chennai, Surat and Jaipur, all of which are major centres for the industry. It thus has a wide reach and is able to have a closer interaction with members to serve them in a direct and more meaningful manner. Over the past decades, GJEPC has emerged as one of the most active EPCs and has continuously strived to both expand its reach and depth in its promotional activities as well as widen and increase services to its members.
FAQs
What is the Taxation and Other Laws (Amendment) Bill 2026?
It is a proposed legislation introducing, among other provisions, a full income tax exemption for eligible foreign companies trading rough diamonds through India’s Special Notified Zones.
Why has GJEPC welcomed the Bill?
GJEPC believes the Bill creates a globally competitive tax framework that will help India become a leading international rough diamond trading hub.
How long will the tax exemption remain in effect?
The exemption is proposed to be available from 1 October 2026 until 31 March 2041.
Which entities are covered under the exemption?
Eligible foreign mining companies, sightholders, brokers, aggregators, and tender and auction entities engaged in the rough diamond trade through Special Notified Zones.
What impact will the Bill have on India’s diamond industry?
The Bill is expected to improve direct sourcing opportunities, strengthen India’s Special Notified Zone ecosystem, increase international participation, and enhance India’s global competitiveness in rough diamond trading.
What additional steps has GJEPC requested?
GJEPC has requested CBDT to introduce a simple compliance framework before the effective date and has also sought corresponding amendments to the Foreign Trade Policy and Customs Circulars.
Source: SVAR Media Network
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