Chaired by CCPA Chief Commissioner Nidhi Khare, the consultation addressed critical concerns regarding the lack of standardised terminology and inadequate disclosure practices in the diamond industry.
The Ministry of Consumer Affairs, Food and Public Distribution noted that these gaps have led to consumer confusion and misleading practices, particularly in distinguishing between natural and lab-grown diamonds.
Key aspects of the existing legal and regulatory framework were discussed in detail, especially those requiring standardisation.
For instance, Section 12 of the Legal Metrology Act of 2009 defines the unit of mass for diamonds, pearls, and precious stones as the carat (symbol: c), which is equivalent to 200 milligrams or 0.0002% of a kilogram. This ensures standardised measurements for consistency in commercial transactions across the diamond industry.
The IS code 15766:2007, issued by the Bureau of Indian Standards (BIS), mandates that the term “diamond” must exclusively refer to natural diamonds. Synthetic diamonds cannot be labelled simply as “diamonds” without qualification and must be explicitly referred to as “synthetic diamonds”, regardless of the production method or material used.
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To maintain market clarity, synthetic diamonds are also prohibited from being graded alongside natural diamonds.
Under the Consumer Protection Act, 2019, a robust legal framework is in place to safeguard consumer interests by preventing unfair trade practices and ensuring transparent labelling in the diamond industry. This prohibits misleading descriptions or omissions that may confuse consumers.
Furthermore, the Central Board of Indirect Taxes and Customs (CBIC) reinforced these measures with Circular No. 21/2024, dated October 30, 2024, mandating the explicit declaration of whether a diamond is natural or lab-grown. If lab-grown, the production method—Chemical Vapour Deposition (CVD), High-Pressure High-Temperature (HPHT), or others—must be specified to ensure transparency and accountability in the diamond sector.
Emphasising the need for ethical marketing practices and consistent terminology to enhance consumer protection, the industry has proposed comprehensive guidelines to mandate explicit labelling and certification of all diamonds, specifying their origin and production method.
The industry has also called for the prohibition of misleading terms like “natural” or “genuine” for lab-grown products, along with establishing accreditation systems to regulate and standardise diamond testing laboratories, thereby curbing the rise of unregulated entities.
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(Edited by : Vijay Anand)
