Diamond Imprest Authorization (DIA) Scheme: A Game-Changer for India's Diamond Industry

The Diamond Imprest Authorization (DIA) Scheme is a landmark initiative introduced by the Indian government to boost the country’s diamond industry. Effective from April 1, 2025, this scheme allows the duty-free import of natural cut and polished diamonds, ensuring that India maintains its dominant position in the global diamond trade. The scheme is expected to increase exports, support small and medium enterprises (SMEs), and create employment opportunities in the sector.

Why the DIA Scheme?

India has been a global leader in the diamond cutting and polishing industry, contributing significantly to world trade. However, several challenges, including high import duties, competition from diamond-mining nations, and value-addition policies in countries like Botswana, Namibia, and Angola, have posed a threat to India’s diamond sector. The DIA Scheme is designed to counteract these challenges and prevent Indian diamond manufacturers from shifting their investments to other countries.

Key Features of the Diamond Imprest Authorization Scheme

• Duty-Free Import of Diamonds: One of the biggest advantages of this scheme is that it allows duty-free imports of natural cut and polished diamonds weighing less than 0.25 carats (25 cents). This will reduce costs for Indian diamantaires and encourage value addition within the country.

• Export Obligation with Value Addition: To prevent misuse and ensure that the scheme benefits the export sector, companies availing of the DIA Scheme must fulfill an export obligation with a minimum value addition of 10%. This means that the imported diamonds must be processed further and exported with added value, ensuring that India continues to dominate the global diamond supply chain.

• Eligibility Criteria: The scheme is specifically targeted at large-scale and experienced diamond exporters. Only exporters who hold Two Star Export House status or higher, with annual exports of at least USD 15 million, can take advantage of the duty-free imports. This ensures that only serious and well-established players in the industry benefit from the scheme.

• Boosting MSMEs and Employment Opportunities: The DIA Scheme is expected to create significant employment opportunities, particularly for diamond assorters, cutters, and polishers. The Micro, Small, and Medium Enterprises (MSME) sector, which forms a crucial part of India’s diamond industry, will benefit immensely from reduced costs and increased competitiveness. This move will level the playing field for smaller businesses, allowing them to compete with global players.

Impact of the DIA Scheme on the Diamond Industry

The DIA Scheme is expected to have far-reaching effects on the Indian diamond industry:

• Increased Export Competitiveness: With lower import costs and assured value addition, India’s diamond exports will become more competitive in international markets.

• Prevention of Investment Relocation: Indian diamantaires who were considering shifting their operations to diamond-mining countries may now retain their investments within India, strengthening the domestic industry.

• Job Creation: The scheme will generate employment opportunities, especially for skilled workers in the diamond cutting and polishing sector.

• Stabilization of the Industry: The scheme will help revive the industry, which has faced export slowdowns and job losses in recent years.

Conclusion

The Diamond Imprest Authorization (DIA) Scheme is a strategic initiative that aims to strengthen India’s diamond industry while maintaining its dominance in the global market. By offering duty-free imports, ensuring value addition, and supporting SMEs and employment generation, the scheme is expected to bring stability and growth to the sector. As India continues to adapt to changing global trade dynamics, this scheme will play a crucial role in keeping the country at the forefront of the diamond industry.

This move is not just about economic benefits but also about securing India’s long-term position as a global leader in diamond processing and exports. The DIA Scheme is a game-changer for the industry and will set the stage for sustained growth and innovation in the years to come.