Surat: The recently cleared bill granting income tax exemption for 15 years on income from the sale of rough diamonds through notified Special Notified Zones (SNZs) has brought Surat into sharper focus as India looks to expand its rough diamond trading activity.Industry captains in the city have termed it a key reform, while global trade partners and auction firms have described the move as encouraging.Surat already polishes about nine out of every 10 diamonds processed globally, and a steady rise in direct rough imports is reinforcing its position beyond manufacturing. Rough import trends indicate the city accounts for more than 80% of India’s direct rough diamond imports, volumes that earlier moved through Mumbai largely due to taxation and procedural requirements.“Tax exemption is an important step towards resolving long-pending procedural challenges related to export-import operation in diamond and other key industries,” said Govind Dholakia, diamantaire and BJP Rajya Sabha MP.Until now, many medium-sized manufacturers bought rough through auctions held in Dubai and Antwerp. Even when international auction houses visited India, they typically only displayed goods locally, with supply routed later from overseas hubs. Sales by auction houses and mining companies attracted income tax, a structure that market participants said reduced competitiveness for domestic buyers.With the proposed tax relief, industry leaders expect more rough sales to shift to SNZs. “Since Surat polishes over 90% of global roughs, the auctions will come to the city and purchase of roughs will become smooth for a segment of manufacturers,” Dholakia said.Rough import data over the past decade shows the changing geography of the trade. In 2015-16, Mumbai imported $5,211 million of rough diamonds versus Surat’s $8,629 million. By 2017-18, Mumbai rose to $12,890 million while Surat fell to $5,608 million. The trend later reversed: in 2022-23, Surat imported $13,038 million against Mumbai’s $3,078 million, and in 2025-26, Surat recorded $8,429 million compared with Mumbai’s $1,960 million.“The tax exemption announcement is encouraging. But the ecosystem like Dubai is yet to be developed,” said Mehul Soni of Trans Atlantic Gem Sales.Surat’s auction ambitions are also gaining visibility. Over 1 million carats of rough valued near $100 million were displayed earlier this year at the Surat Diamond Bourse alongside multiple auction sessions. “Many mining companies, broker and trades are ready to come to Surat,” said Indian Diamond Institute chairperson Dinesh Navadiya.
