CCPA to bring regulatory framework for diamond industry to protect consumers interest

NEW DELHI: The government is looking to draft guidelines for diamonds specifying definitions for natural and lab grown stones, said the ministry of consumers affairs in a statement on Tuesday. The proposed guidelines will have explicit labelling and certification of all diamonds, specifying their origin and production method and have clauses for prohibition of misleading terms like "natural" or "genuine" for lab-grown products.

The proposed guidelines will also develop an accreditation system to regulate and standardise diamond testing laboratories, curbing the rise of unregulated entities.

The Central Consumer Protection Authority (CCPA), which operates under the ministry of consumer affairs, had organised a stakeholder consultation with representatives of the diamond industry to discuss the use of appropriate terminology for diamonds chaired by Nidhi Khare, chief commissioner, CCPA, the statement added.

"There has been a meeting between DGFT (Directorate General of Foreign Trade), consumer affairs ministry and Union commerce ministry on natural and lab-grown diamonds industry. Both the natural diamond committee and lab-grown diamond committee are working towards measures so the interest of both the sectors are not impacted and consumers are not duped," said Kirit Bhansali, vice-chairman of Gem & Jewellery Export Promotion Council (GJEPC), adding that even though lab-grown diamonds has similar carbon content like natural diamonds and are environmental friendly, it has to be clearly stated that it is synthetic and are not mined naturally.

While a carat of lab-grown diamond costs about Rs 65,000-Rs 80,000, the price of a carat of natural diamonds is Rs 4-Rs 4.5 lakh. At present, section 12 of the Legal Metrology Act, 2009, provides the unit of mass for diamonds, pearls, and precious stones as the carat, equivalent to 200 milligrams or one five-thousandth of a kilogram, ensuring standardised measurements for consistency in commercial transactions across the diamond industry.

The Bureau of Indian Standards (BIS) Standard IS 15766:2007 mandates that the term "diamond" alone must exclusively refer to natural diamonds. Synthetic diamonds cannot be labelled "diamond" without qualification and must be explicitly referred to as "synthetic diamonds," irrespective of the production method or material used.

To maintain market clarity, synthetic diamonds are also prohibited from being graded alongside natural diamonds. The Central Board of Indirect Taxes and Customs (CBIC) reinforced these measures, by Circular No. 21/2024, dated October 30, 2024, mandating the explicit declaration of whether a diamond is natural or lab-grown, and if lab-grown, the production method-chemical vapor deposition (CVD), high pressure high temperature (HPHT), or others-must be specified to ensure transparency and accountability in the diamond sector.