CaratFifteen years, no tax: what Mumbai just offered to take from Dubai
India's lower house passed a Bill on 6 August exempting qualifying foreign rough sellers from income tax between 1 October 2026 and 31 March 2041. It replaces a safe harbour that presumes profit at 1.25% of gross revenue, against corporate rates reaching about 33%.
§1Fifteen years, two bourses.
India has put a fifteen-year tax holiday on the table for the foreign companies that sell rough diamonds into its bourses. The Taxation and Other Laws (Amendment) Bill, 2026 passed the Lok Sabha on 6 August and proposes exempting qualifying non-resident sellers of rough from Indian income tax between 1 October 2026 and 31 March 2041. The exemption is conditional on the sale taking place inside a Special Notified Zone, of which two matter: the zone inside the Bharat Diamond Bourse in Mumbai and the one at the Surat Diamond Bourse. Miners, brokers, aggregators, auction operators and sightholders all fall within the class of seller the Bill describes, and a qualifying company must furnish information when asked.
What the Bill removes is a piece of arithmetic that has kept rough auctions out of India for a decade. A foreign miner selling rough in an Indian zone today can elect a safe harbour that presumes taxable profit at 1.25% of gross revenue, or else face Indian corporate tax at rates reaching about 33% of profit. Neither figure is punitive on its own. The obstacle is that both require a foreign seller to take an Indian tax filing position on goods it intends to sell and move out within days, and that is a cost Dubai and Antwerp do not impose on the same parcel. Zero for fifteen years removes the calculation rather than lowering it.
§2The arithmetic it removes.
The target is not disguised. India cuts and polishes the large majority of the world's rough but buys very little of it on Indian soil, which means the stone crosses a border twice before a Surat wheel touches it, and the intermediary trading centre collects the margin, the storage and the paperwork on the way through. This paper reported on 2 August that a single tender cleared at 100% in Dubai against 75% in Johannesburg, and on 15 July that Dubai's diamond trade was worth $41.7 billion in a year. The Gem and Jewellery Export Promotion Council, which has lobbied for this change for years, welcomed the introduction as a step for India's rough trading ecosystem. Antwerp, whose position this desk covered on 2 August, has the same exposure with less growth behind it.
Zero for fifteen years removes the calculation rather than lowering it.
§3Cleared one house of two.
None of this is law. The Bill has cleared the lower house only. It requires passage through the Rajya Sabha and presidential assent before any exemption exists, and no date has been set for a hearing in the upper house, though the trade bodies quoted expect it to pass. That leaves the 1 October start date as an intention rather than a commitment, roughly eight weeks out, with two procedural steps and no calendar between here and there. A miner building a 2027 tender schedule around a Mumbai or Surat sale is currently building it on a Bill, and the sensible position is to plan the logistics and withhold the commitment until assent.
The cheapest thing a government can give a diamond trade is certainty about where the paperwork happens, and India has just offered fifteen years of it. Price is not what has kept rough tenders in Dubai and Antwerp; predictability is, and a fifteen-year window is long enough to survive three Indian governments and to justify a producer moving a permanent sales function rather than flying in for a week. The read for a cutter is that landed rough cost could fall by the intermediary's cut rather than by any change in the mine price, which is the only kind of cost relief available in a year when both major producers are shrinking output on purpose. The read for Dubai is that its 100% clearance rates were earned in the absence of a competitor with a hundred thousand polishers behind it.
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