India’s decades-long ambition to transform from the world's primary diamond polishing workshop into a global trading powerhouse has taken a decisive leap forward. Both Houses of Parliament have passed the Taxation and Other Laws (Amendment) Bill, 2026, introducing landmark tax reforms that pave the way for a transition from a "Made in India" model to a "Trade in India" reality.
The central highlight of the legislation is a 15-year statutory income-tax exemption—valid until March 31, 2041—granted to eligible foreign mining companies, sightholders, brokers, aggregators, and auction entities. This exemption applies to income earned from the sale of rough diamonds conducted through India’s Special Notified Zones (SNZs), such as those established at the Surat Diamond Bourse (SDB) and the Bharat Diamond Bourse (BDB) in Mumbai.
The reform addresses a long-standing structural bottleneck in India's gem and jewellery sector. While Surat processes and polishes nearly 90% of the world’s diamonds, international miners historically faced heavy tax liabilities if they completed transactions on Indian soil. As a result, while rough stones could be displayed in domestic SNZs for viewing, the actual sales and bidding were finalized offshore in global trading hubs like Dubai, Antwerp, and Gaborone.
Under the newly passed bill, foreign mining firms can now directly sell rough diamonds within Indian SNZs without incurring domestic tax burdens. Industry experts note that the measure will significantly streamline supply chains, reduce logistics costs, and directly benefit 1 to 1.5 million artisans, polishers, and small and medium-sized enterprise (SME) personnel who form the backbone of the domestic manufacturing ecosystem.
Following the passage of the bill in the Rajya Sabha, Govind Dholakia—Hon'ble Member of Parliament (Rajya Sabha), Chairman of SRK Exports, and Chairman of the Surat Diamond Bourse—met with Union Finance Minister Nirmala Sitharaman to express the gratitude of the diamond industry. Dholakia described the reform as a crucial step toward eliminating historical hurdles, enhancing global competitiveness, and securing the supply chain for domestic manufacturers.
Industry representatives across key trade bodies have echoed this enthusiasm while highlighting the practical impact the policy will have on everyday operations. Anoop Mehta, President, Bharat Diamond Bourse, framed the legislative change as a necessary evolution for domestic manufacturers.
"This is a step in the right direction for the Indian diamond industry," Mehta stated. "The reform will make it easier for manufacturers to access rough diamonds directly in India, without having to travel overseas to source them. This is something the industry has been waiting for for many years. While the reform is still in its early stages and there will be a period of adjustment as the new system takes shape, we believe India is headed in the right direction."
The mechanics of how the amendment reshapes the trading ecosystem were outlined by Mehul Shah, President of the World Federation of Diamond Bourses (WFDB) and founder of the India Diamond Trading Centre (IDTC). Shah pointed out that the previous framework created unnecessary friction and costs for both buyers and sellers.
"So earlier, these goods were coming for display. It was like an exhibition," Shah explained. "Every week or month, there used to be a display of the rough diamonds and people from all over the world, including India, will go to see those rough diamonds, whether it is in Botswana or Dubai or Belgium. Everybody will go, and then the goods will be sold through the global auctions online."
Shah noted that the creation of the IDTC at the Bharat Diamond Bourse laid the groundwork for bringing rough goods directly to domestic soil, but tax obstacles prevented the final step of direct sales.
"Now the new thing has come that if the same mining companies sell directly to the Indian manufacturers or the traders, the mining company will not be taxed on that," Shah said. "So three things: one, mining companies feel comfortable selling in India to the direct Indian traders or manufacturers—they will not be taxed. Second, time savings, and no need to go back and come back again, because 90% of the global diamonds are polished in India only. So it will save the logistics cost and also time. It is only for the mining companies who are registered and approved by the government."
Shah emphasized that the primary beneficiaries of this tax holiday will be India's mid-scale and smaller diamond units, which previously lacked the resources to maintain overseas buying offices or frequently travel abroad for tenders.
"If the goods come more to India, it will help the smaller manufacturers," Shah added. "Going to Gaborone in Botswana is a very long route and it is expensive—not many people can go, only selective people can go. Dubai has regular auctions, but most of the big companies have their counterparts in Dubai to look at the goods. But for the smaller and mid-scale manufacturers, it becomes very difficult to keep on traveling to these countries and spending money. Now the goods are coming here, and they have a direct opportunity to buy the diamonds straight from the miners. Miners will also be happy to keep their goods for a longer period and try to sell directly to Indian manufacturers."
With the 15-year statutory window running through 2041, the government and industry stakeholders expect Surat and Mumbai to solidify their positions alongside Antwerp and Dubai as premier global hubs for rough diamond trading.
