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Nov 4

CBIC Mandates Declaration of Lab-Grown Diamond Manufacturing Method for Export and Import


From December 1, it will become mandatory for exporters and importers to declare the method used for producing lab-grown diamonds, as per a directive from the Central Board of Indirect Taxes & Customs (CBIC). This new requirement is aimed at streamlining processing, inspection, and overall trade facilitation.


Lab-grown diamonds (LGDs), also known as synthetic or reconstructed diamonds, have gained substantial market traction. Valued at $1 billion in 2020, the lab-grown diamond jewelry market is projected to reach $5 billion by 2025 and over $15 billion by 2035.


According to a CBIC circular, this requirement aligns with the Bill of Entry and Shipping Bill regulations of 2018 and 2019, enhancing the quality of customs assessments. Exporters and importers will need to specify one of three manufacturing methods: Chemical Vapor Deposition (CVD), High Pressure-High Temperature (HPHT), or other techniques.


Data from the Gem and Jewellery Export Promotion Council (GJEPC) highlights a growth of over 100% in LGD exports during 2021-22, followed by a 28% increase in 2022-23. However, 2023 saw a 16.5% decline, with gross exports dropping from $1,680 million to $1,402 million. Industry insiders attribute this to a drop in price per carat, despite increased trade volumes, citing market corrections in a non-monopolized business.


The CBIC emphasized that declaring manufacturing methods will reduce inefficiencies, minimize customs queries, and improve assessment processes. Previously, a 2020 circular had encouraged importers to provide comprehensive descriptions, but information about production methods remained insufficient. This change is expected to refine policy-making and accelerate cargo clearance.


The Gems and Jewellery sector is crucial to India's economy, contributing around 9% to total merchandise exports. Lab-grown diamonds have applications beyond jewelry, including use in computer chips, satellites, 5G networks, and various industries like defense, optics, and medicine, due to their efficiency and durability in extreme conditions.



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