Enhancing India’s Diamond Sector: The DIA Scheme
The Department of Commerce, Government of India, has launched the Diamond Imprest Authorization (DIA) Scheme on January 21, 2025. This initiative aims to boost the global competitiveness of India’s diamond industry. The scheme will allow for the duty-free import of natural cut and polished diamonds, thereby promoting value addition and increasing exports. The implementation of this scheme is set to begin on April 1, 2025.
Key Features of the DIA Scheme
The DIA Scheme introduces several important features designed to support the diamond sector. One of the primary benefits is the allowance for duty-free imports of natural cut and polished diamonds weighing less than ¼ carat (25 cents). This provision is expected to significantly reduce costs for diamond manufacturers and exporters, making it easier for them to source raw materials.
Additionally, the scheme mandates an export obligation that requires a value addition of at least 10%. This means that exporters must enhance the value of the diamonds they import before selling them in international markets. Such a requirement encourages local processing and adds value to the diamonds, which can lead to higher profits for exporters.
Eligibility for the scheme is limited to diamond exporters who hold a Two Star Export House status or higher and have annual exports of at least $15 million. This criterion ensures that the benefits of the scheme are directed towards established players in the industry, who can effectively utilize the advantages provided by the scheme to enhance their operations.
Addressing Global Competition
The DIA Scheme is a strategic response to the beneficiation policies adopted by several natural diamond mining countries, such as Botswana, Namibia, and Angola. These countries require diamond manufacturers to establish cutting and polishing facilities to ensure a minimum percentage of value addition. By implementing the DIA Scheme, India aims to retain its position as a global leader in the diamond industry value chain.
The scheme is particularly focused on supporting Micro, Small, and Medium Enterprises (MSMEs) in the diamond sector. By providing a level playing field, it enables smaller exporters to compete effectively against larger firms. This is crucial in preventing the potential flight of investments by Indian diamantaires to diamond-mining destinations, which could undermine the domestic industry.
Moreover, the scheme is expected to create numerous employment opportunities, especially for diamond assorters and workers involved in the processing of semi-finished diamonds. By facilitating Indian exporters, the DIA Scheme seeks to protect the domestic diamond processing industry and sustain the jobs associated with it.
Impact on Employment and Exports
The diamond industry in India has been facing significant challenges, including a decline in exports and job losses among workers. The DIA Scheme is designed to combat these trends and rejuvenate the industry. By facilitating easier access to raw materials and encouraging value addition, the scheme aims to boost exports of cut and polished diamonds from India.
The implementation of the DIA Scheme is anticipated to create new employment opportunities for skilled craftsmen in the diamond industry. As the demand for processed diamonds increases, more workers will be needed to meet this demand. This will not only help to stabilize the current workforce but also contribute to the overall growth of the industry.
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