Sector Guides
Gems & Jewelry Exports from India: Compliance Guide
KPCS for rough diamonds, GJEPC membership, Chapter 71 HS codes, duty-free import schemes, lab-grown diamond rules, and forex provisions for gem exports.
By Aaryan Kakani · · 10 min read
India's Gems & Jewelry Export Landscape
India is the world's largest cutting and polishing centre for diamonds, with Surat alone processing an estimated 90% of the world's diamonds by volume. The broader gems and jewelry sector (spanning diamonds, gold jewelry, silver articles, colored gemstones, and imitation jewelry) crossed $37 billion in exports during FY2026, making it the second-largest merchandise export category after petroleum.
Three cities anchor the trade. Surat is the diamond capital: rough diamonds arrive from Antwerp, Dubai, and African mining centres, get cut and polished in thousands of workshops, and ship back as finished goods. Mumbai's SEEPZ (Santacruz Electronics Export Processing Zone) is the country's primary hub for gold and studded jewelry manufacturing for export, operating under a special customs regime that allows duty-free import of gold and precious stones. Jaipur dominates colored gemstones (emeralds, rubies, sapphires) along with kundan and polki jewelry for both domestic and export markets.
The regulatory framework for this sector is more layered than most. You are dealing simultaneously with the Kimberley Process (an international treaty regime), BIS hallmarking (a domestic standards body), GJEPC (the sector's export promotion council), special customs procedures at nominated agencies and SEZs, and the standard export documentation and FEMA compliance that applies to all Indian exporters.
Key Compliance Requirements
Kimberley Process Certification Scheme (KPCS)
The Kimberley Process is an international agreement designed to prevent "conflict diamonds" from entering the legitimate diamond trade. India is a participant, and all rough diamond imports and exports must be accompanied by a Kimberley Process Certificate (KPC). The scheme applies exclusively to rough diamonds. Cut and polished diamonds, jewelry, and industrial diamonds are exempt.
In India, the KPC is issued by the Government Diamond Office in Mumbai. Every parcel of rough diamonds must be shipped in a tamper-resistant container, accompanied by the original KPC, and can only move through authorised trading centres. Import consignments without a valid KPC from the exporting country's designated authority are seized at customs.
BIS Hallmarking for Gold Jewelry
The Bureau of Indian Standards (BIS) hallmarking mandate requires all gold jewelry sold domestically in India to carry a BIS hallmark certifying purity (14K, 18K, 22K). For pure exports , BIS hallmarking is not mandatory. The BIS Hallmarking Order applies to domestic sale. However, there are two important exceptions: jewelry exported for exhibitions or approvals that may be re-imported, and jewelry destined for markets like the UK where local hallmarking by an assay office is required before retail sale.
Many international buyers contractually require hallmarking (BIS or equivalent) as a quality assurance measure, even when the destination country does not legally mandate it. If you are exporting gold jewelry, check your buyer's specifications carefully.
GJEPC Membership
The Gem & Jewellery Export Promotion Council (GJEPC) is the apex body for the sector, set up by the Ministry of Commerce. GJEPC membership is effectively mandatory for any serious gems and jewelry exporter because it is required for accessing duty-free import schemes, obtaining certificates of origin , participating in international trade fairs (like the India International Jewellery Show), and getting your IEC mapped for sector-specific customs clearances.
Special Customs Procedures
Gems and jewelry exports do not follow the standard port-based customs clearance. Diamond consignments move through nominated agencies and require Form H (a specialised customs declaration for diamond parcels). SEEPZ and other SEZs have their own customs infrastructure with on-site appraisal and sealing. Gold and precious metal consignments are cleared through nominated banks and agencies authorised by the DGFT.
HS Code Classification: Chapter 71
All gems and jewelry products fall under Chapter 71 of the Harmonized System. Getting the HS code right is critical because duties, FTA preferences, and compliance requirements vary sharply even within the chapter. Here are the key classifications:
| Product | HS Code | Notes |
|---|---|---|
| Rough diamonds (unsorted) | 7102.10 | Subject to KPCS; requires KP certificate |
| Rough diamonds (industrial) | 7102.21 | KPCS applies; lower value per carat |
| Rough diamonds (non-industrial) | 7102.31 | KPCS applies; gem-quality rough |
| Cut and polished diamonds | 7102.39 | KPCS exempt; most common Indian diamond export |
| Gold jewelry | 7113.19 | Hallmarking may apply by destination market |
| Silver jewelry | 7113.11 | UK requires assay office hallmarking |
| Imitation jewelry | 7117 | Lower compliance burden; nickel/lead restrictions in EU/US |
Duty-Free Import for Re-Export
India's gems and jewelry industry is fundamentally an import-process-export operation. Rough diamonds are imported, cut and polished, and re-exported. Gold is imported, converted into jewelry, and shipped out. The Foreign Trade Policy provides several schemes to enable this without the burden of import duty on raw materials:
Key schemes and value addition norms
- Advance Authorisation: duty-free import of inputs (rough diamonds, gold, silver, gemstones) against a specific export order. The export obligation must be fulfilled within 18 months.
- Replenishment Authorisation: allows duty-free replacement of inputs already used in completed exports. Issued after export proof is submitted.
- Cut & polished diamonds: minimum value addition of 10% over CIF value of imported rough is required to qualify for duty-free treatment.
- Gold jewelry: minimum value addition of 3% over the cost of gold content. This is one of the lowest value addition thresholds in Indian trade policy, reflecting the nature of the product.
Failure to meet the minimum value addition norm means Customs can demand the full import duty on the raw materials, plus interest. For gold at current prices, that can be a substantial amount. Exporters operating in SEEPZ or other SEZs get additional procedural advantages (bonded warehousing, on-site customs clearance, and streamlined documentation) but the value addition norms still apply.
Top Markets and Their Requirements
United States
The USA is India's largest gems and jewelry export market. Key requirements include HTS-based duties on jewelry (ranging from 3.3% to 13.5% depending on material and classification), the FTC Guides for the Jewelry, Precious Metals, and Pewter Industries which mandate accurate disclosure of gemstone treatments, origins, and whether stones are natural or lab-grown. The $800 de minimis threshold means small consignments shipped directly to US consumers enter duty-free, but commercial shipments above this value face full duty and CBP scrutiny.
United Arab Emirates
The UAE, particularly Dubai, serves as both a direct market and a re-export hub for Indian gems and jewelry. The Dubai Multi Commodities Centre (DMCC) is the world's largest free trade zone for diamonds and gold. Import duties on gems and jewelry into the UAE are effectively zero under the GCC framework. Many Indian exporters route goods through Dubai for onward sale to Africa, CIS countries, and other markets. The India-UAE CEPA provides additional tariff benefits and streamlined certificate of origin procedures.
Belgium (Antwerp)
Antwerp is the world's diamond trading capital, and Belgium is one of India's largest trading partners for rough and polished diamonds. The Antwerp World Diamond Centre (AWDC) oversees the diamond trade, and HRD Antwerp provides grading and certification services. Belgian customs apply EU common external tariff rates (generally 0% for rough and polished diamonds, 2.5% for jewelry). Indian exporters shipping to Antwerp must comply with EU product safety regulations, including REACH for nickel content in jewelry.
Hong Kong
Hong Kong charges zero import duty on gems and jewelry and acts as a major trading and re-export hub, especially for the Chinese mainland market. For premium diamonds, GIA (Gemological Institute of America) grading reports are the market standard. Buyers in Hong Kong generally will not accept ungraded stones above 0.3 carats. The Hong Kong Trade Description Ordinance requires that any gemstone treatment be disclosed at the point of sale.
United Kingdom
Post-Brexit, the UK operates its own tariff schedule separate from the EU. Duty on gold and silver jewelry ranges from 0% to 4% depending on classification. The critical compliance point for the UK market is assay office hallmarking : all gold, silver, platinum, and palladium articles offered for sale in the UK must be hallmarked by one of the UK's four assay offices (London, Birmingham, Sheffield, Edinburgh). Indian BIS hallmarks are not recognised. Exporters must either ship to a UK assay office for hallmarking before retail sale or work with an importer who handles this step.
Lab-Grown Diamonds
Lab-grown diamonds (LGDs) have become a significant and fast- growing segment of India's diamond exports, with Surat emerging as a global manufacturing hub for CVD (Chemical Vapour Deposition) and HPHT (High Pressure High Temperature) diamonds. The Union Budget 2026 removed the Basic Customs Duty (BCD) on seeds and machinery for LGD production, further boosting the sector.
Lab-grown diamonds have separate HS codes from natural diamonds and must be classified distinctly. Under Indian trade policy, LGDs fall under HS 7104.91 (synthetic or reconstructed diamonds, unworked or simply sawn) and 7104.99 (worked). The Kimberley Process does not apply to lab-grown diamonds since they are not mined.
Foreign Exchange Provisions for Diamond and Gem Exports
The gems and jewelry sector has special foreign exchange provisions under FEMA that differ from general merchandise exports, reflecting the unique trading practices of the industry:
Special forex provisions
- 15-day advance remittance window: Diamond exporters can receive advance payment up to 15 days before shipment under a simplified reporting procedure. This accommodates the sight (viewing) system where buyers inspect goods before confirming the purchase.
- Sight/memo consignment rules: Diamonds are frequently sent on approval or consignment (memo basis) to overseas buyers for inspection. These consignment movements have specific EDPMS treatment. The shipping bill is filed as a consignment export, and the EDPMS entry is only closed when the buyer either pays or returns the goods.
- EDPMS treatment: All gems and jewelry exports are tracked through the Export Data Processing and Monitoring System . The standard 9-month repatriation deadline applies, but consignment exports have extended timelines as long as the goods are accounted for (either returned or paid for).
- Diamond Dollar Accounts: Authorised dealers in the diamond trade can maintain Diamond Dollar Accounts (DDAs) to facilitate faster settlement of international diamond transactions without converting to INR for each trade.
Common Compliance Issues
Under-Invoicing Scrutiny
Gems and jewelry are among the most heavily scrutinised product categories for valuation by both Indian Customs and destination-country authorities. The subjective nature of gemstone valuation (two visually similar diamonds can differ 10x in price based on cut, clarity, colour, and carat weight) makes this sector a perennial target for under-invoicing and over-invoicing investigations. Indian Customs uses reference price databases and may require independent valuation certificates from approved laboratories.
Transfer Pricing in Related-Party Transactions
Many Indian diamond and jewelry exporters sell to related entities overseas. A family member's firm in Antwerp, a subsidiary in Dubai, an affiliate in Hong Kong. These related-party transactions attract transfer pricing scrutiny from both Indian tax authorities and the destination country. The arm's length principle must be demonstrable, with independent valuation reports and comparable uncontrolled price analysis. The Income Tax department's transfer pricing officers have dedicated teams for the gems and jewelry sector.
Conflict Diamond Allegations
Even with the Kimberley Process in place, Indian diamond exporters can face conflict diamond allegations from NGOs, investigative journalists, or destination-country authorities. Maintaining a complete chain-of-custody documentation from rough diamond source to finished product is essential. Beyond the KPCS certificate, responsible exporters maintain internal due diligence systems covering supplier verification, lot traceability, and compliance with the OECD Due Diligence Guidance for Responsible Supply Chains.
Frequently Asked Questions
Do I need a Kimberley Process certificate for exporting cut and polished diamonds from India?
No. The KPCS applies only to rough diamonds (HS 7102.10, 7102.21, and 7102.31). Cut and polished diamonds (HS 7102.39) are exempt. However, you should be able to demonstrate that the rough diamonds used were sourced from legitimate, conflict-free channels. Many importing countries may ask for origin documentation even for finished stones.
What is the minimum value addition required for duty-free import of rough diamonds for re-export?
For cut and polished diamonds, the minimum value addition is 10% over the CIF value of imported rough. For gold jewelry, it is 3% over the cost of gold content. These norms apply under Advance Authorisation and replenishment authorisation schemes. Failure to meet the threshold results in Customs demanding full import duty on the raw materials, plus interest.
Is BIS hallmarking mandatory for gold jewelry exported from India?
No. BIS hallmarking is mandated for domestic sale within India, not for exports. However, some destination markets (notably the UK) require their own hallmarking through local assay offices, and buyers in other markets may contractually require BIS or equivalent hallmarking as a quality assurance measure.
Update history
- First published.