Diamond Imprest Authorization (DIA) Scheme to Allow Duty Free (BCD-10%; IGST-1.5%) Diamonds in Cut and Polished Form from Source Countries like Botswana and Namibia Introduced

·         Scheme to Support MSME Diamond Exporters and Safeguard Domestic Industry

·         The new scheme earlier issued under Customs Notification 42/28.04.1999 (p.1137 of BIG’s Easy Reference Customs Tariff)

·         Minimum 10% value add for duty free export, No one to one correlation between import and export only small demands of ¼ carat allowed.

·         Only large exporter allowed with Import and Export through Mumbai Airport

·         No transfer to vendors sub-contractors allowed

·         Value addition through trading?

·         No rupee trading including Vostro Account, only hard currency

·         Reaction to plummeting export to be due to over import!

·         Bond and Bank Guarantee for Duty

·         A minimum value addition of l0% by realizing in Free Foreign Exchange, within specified time limits.

·         Diamond Imprest Authorisation does not apply to Lab-Grown Diamonds (LGDs).

·         Two Star Export House status or above, and having achieved a minimum export performance of US$ 15 million in Cut & Polished Diamonds each year for the past three financial years.

·         5% of the average annual export performance of Cut & Polished Diamonds over the previous three financial years subject to a maximum value of US$:15 million.

·         All imports and exports shall be made only through Mumbai Air Port.

·         Diamond Imprest Authorisation and material imported under Diamond Imprest Authorisation shall be subject to 'Actual User' condition.

4.60 Diamond Imprest Authorisation (DIA)

4.61 Eligibility

4.62 Export Obligation

4.63 Details of Duties exempted

4.64. Actual User Condition and Pre-Import Condition for Diamond Imprest Authorisation

Department of Commerce, Government of India has introduced the Diamond Imprest Authorization (DIA) Scheme on 21st of January 2025, aiming to enhance the global competitiveness of India’s diamond sector. This scheme provides a streamlined mechanism for duty free import of Natural Cut and Polished Diamonds, and there by promoting value addition and boosting exports. The Scheme will be implemented with effect from 01.04.2025.

Key Features of the Scheme:

·         This scheme allows the duty-free import of Natural Cut and Polished Diamonds, of less than ¼ Carat (25 Cents).

·         This scheme mandates export obligation with a value addition of 10%.

·         All Diamond exporters holding Two Star Export House status and above and having US $15 Million exports per year, are eligible for availing the benefit under this scheme.

The scheme is made in response to Beneficiation policies undertaken in a number of natural diamond mining countries like Botswana, Namibia Angola etc where Diamond manufactures are obliged to open cut and polishing facilities for a minimum percentage of value addition. This scheme is aimed towards retaining India’s position as a global leader in the entire value chain of Diamond industry. 

The scheme is designed to provide a level playing field for Indian diamond exporters, particularly MSME exporters, enabling them to compete effectively with larger peers. It aims to prevent the potential flight of investments by Indian diamantaires to diamond-mining destinations. Additionally, the scheme is expected to generate more employment opportunities, particularly for diamond assorters and in the processing of semi-finished diamonds in factories. By facilitating Indian exporters, it seeks to protect the domestic diamond processing industry and sustain the associated employment.

The DIA Scheme reinforces India’s position as a leading player in the global diamond trade, ensuring compliance with international standards while facilitating ease of doing business. This scheme also expected to create employment opportunities for skilled craftsmen in diamond industry and is also expected to increase the export of Cut and Polished Diamond from India.

The diamond industry is witnessing a steep decline in exports and job losses for the workers. This scheme is expected to combat this trend and will rejuvenate the Diamond Industry.

[DGFT Notification No. 53/2024-25 dated 21 January, 2025]

Effect of this Notification: The 'Diamond Imprest Authorisation ' (DIA) Scheme has been introduced to boost exports of Diamonds from India. The scheme will be implemented with effect from 01.04.2025.

Subject: Introduction of new Scheme as 'Diamond Imprest Authorisation' under Chapter 4 of Foreign Trade Policy 2023.

S.O.(E): In exercise of powers conferred by Section 3 read with Section 5 of Foreign Trade (Development and Regulation) Act, 1992, read with Paragraph 1.02 of the Foreign Trade Policy, 2023, as amended from time to time, the Central Government hereby notifies the following amendments in Chapter 4 of the Foreign Trade Policy 2023:

I. New paras may be added to the FTP 2023, as follows:

4.60 Diamond Imprest Authorisation (DIA)

Diamond Imprest Authorization may be granted for the import of Natural Cut and Polished Diamonds, including semi-processed, half-cut, and broken diamonds, each weighing no more than 1/.i Carat (25 Cents), against which the physical export of Natural Cut and Polished Diamonds has to be carried out. Such Authorisation shall carry an export obligation to achieve a minimum value addition of l0% by realizing in Free Foreign Exchange, within specified time limits, which has to be discharged in accordance with the procedure specified in this behalf. The Diamond Imprest Authorisation does not apply to Lab-Grown Diamonds (LGDs).

4.61 Eligibility

An exporter with a Two Star Export House status or above, and having achieved a minimum export performance of US$ 15 million in Cut & Polished Diamonds each year for the past three financial years and having filed all GST and Income Tax returns for those years, may be granted a Diamond Imprest Authorization. This authorization allows the import of Natural Cut & Polished Diamonds up to 5% of the average annual export performance of Cut & Polished Diamonds over the previous three financial years subject to a maximum value of US$:15 million.

4.62 Export Obligation

The export obligation against each import consignment shall be fulfilled within a period of six months from the date of clearance of such consignment through Customs.  All imports and exports shall be made only through Mumbai Air Port. The importer shall be required to maintain relevant/ appropriate records of imports & exports for subsequent inspection if any.

4.63 Details of Duties exempted

Imports under Diamond Imprest Authorisation are exempted from payment of Basic Customs Duty, Additional Customs Duty, Education Cess, Anti- dumping Duty, Countervailing Duty, Safeguard Duty, Transition Product Specific Safeguard Duty, wherever applicable. Such, imports are also exempt from whole of the Integrated Tax and Compensation Cess leviable under sub-section (7) and sub-section (9) respectively, of section 3 of the Customs Tariff Act, 1975 (51 of 1975).

4.64. Actual User Condition and Pre-Import Condition for Diamond Imprest Authorisation

i.    Diamond Imprest Authorisation and material imported under Diamond Imprest Authorisation shall be subject to 'Actual User' condition. The same shall not be transferable even after completion of export obligation.

ii.    Diamond Imprest Authorisation is subject to Pre-Import Condition.

2. Sub para (v) may be added in para 4.32 of FTP as under:

(v)        Diamond Imprest Authorisation.

This issues with the approval of Minister of Commerce & Industry.

(Issued from File No. 01/94/ 180/ 152/AM20/PC-4)