CCPA may mandate diamond labelling, ban misleading terms for lab-grown gems

A statement issued by the Ministry of Consumer Affairs, Food and Public Distribution said the meeting “addressed critical concerns regarding the lack of standardized terminology and inadequate disclosure practices in the diamond sector”. “These gaps have resulted in consumer confusion and misleading practices, especially concerning the differentiation between natural diamonds and lab-grown diamonds,” it said.

According to the statement, comprehensive guidelines were proposed to mandate, “Explicit labelling and certification of all diamonds, specifying their origin and production method; prohibition of misleading terms like ‘natural’ or ‘genuine’ for lab-grown products; accreditation systems to regulate and standardise diamond testing laboratories, curbing the rise of unregulated entities.”

“During the consultation, the broad key aspects and prevailing Legal and Regulatory frameworks were discussed in detail. For example, the Legal Metrology Act, 2009, under Section 12, provides the unit of mass for diamonds, pearls, and precious stones as the carat (symbol: c), equivalent to 200 milligrams or one five-thousandth of a kilogram, ensuring standardized measurements for consistency in commercial transactions across the diamond industry,” the statement added.

The Bureau of Indian Standards (BIS) mandates that the term “diamond” alone must exclusively refer to natural diamonds. Synthetic diamonds cannot be labeled as “diamond” without qualification and must be explicitly referred to as “synthetic diamonds,” irrespective of the production method or material used, said the statement.

“To maintain market clarity, synthetic diamonds are also prohibited from being graded alongside natural diamonds,” it said.

“Further, Central Board in Direct Taxes and Custom (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,” the statement said.