Diamond Imprest Authorisation (DIA) Scheme
Context:
The Department of Commerce, Government of India, has launched the Diamond Imprest Authorisation (DIA) Scheme on January 21, 2025, with the objective of strengthening the global competitiveness of India’s diamond industry.
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- Designed to enhance value addition and promote exports, the scheme introduces a streamlined process for the duty-free import of natural cut and polished diamonds.
- The DIA Scheme is set to be implemented from April 1, 2025.
Key Features of the DIA Scheme
- Duty-Free Imports: The scheme allows for the duty-free import of natural cut and polished diamonds of less than ¼ carat (25 cents).
- Export Obligation: Beneficiaries must achieve a 10% value addition as part of their export obligations.
- Eligibility: Only diamond exporters with Two Star Export House status or above, and annual exports of at least USD 15 million, can avail of this scheme.
Diamond Mining
India has a rich history of diamond mining, with the primary focus currently on three states: Madhya Pradesh, Andhra Pradesh, and Chhattisgarh. The most significant diamond mine in India is the Majhgawan mine located in the Panna district of Madhya Pradesh, operated by the National Mineral Development Corporation (NMDC). This mine is the only industrial-scale diamond mine in the country, with a production capacity of approximately 84,000 carats per year. Madhya Pradesh accounts for about 90% of India’s diamond resources, with the Panna region alone holding substantial deposits. Other notable areas include the diamond fields in Andhra Pradesh, particularly in Anantapur, and some occurrences in Chhattisgarh and Odisha. Historically, India was the world’s primary source of diamonds until other deposits were discovered globally, but it remains a key player in the diamond cutting and polishing industry, especially in Surat, Gujarat.
Rationale Behind the Scheme
- The DIA Scheme is inspired by beneficiation policies implemented by diamond-mining countries such as Botswana, Namibia, and Angola.
- These policies require diamond manufacturers to establish cutting and polishing facilities, ensuring local value addition.
- By introducing this scheme, the Indian government aims to retain the country’s leadership in the diamond value chain, preventing investments by Indian diamantaires from shifting to diamond-mining destinations.
Benefits of the Scheme
- Support for MSMEs: The scheme provides a level playing field for Indian diamond exporters, especially small and medium enterprises (MSMEs), enabling them to compete effectively with larger global players.
- Job Creation: The scheme is expected to generate employment opportunities for skilled craftsmen, diamond assorters, and workers involved in processing semi-finished diamonds.
- Boosting Domestic Industry: By encouraging diamond processing within India, the scheme aims to protect the domestic diamond industry and sustain associated jobs.
- Addressing Industry Challenges: India’s diamond sector has been facing challenges, including a steep decline in exports and significant job losses.
- The DIA Scheme is positioned as a countermeasure to these issues, ensuring the rejuvenation of the diamond industry.
The DIA Scheme is expected to result in increased exports of cut and polished diamonds from India, ensuring the sustainable growth of the industry while creating opportunities for employment and economic development.
