Stakeholder Consultation on Consumer Protection in the Diamond Sector Held in New Delhi
UditVani, New Delhi: The Central Consumer Protection Authority (CCPA) organized a significant Stakeholder Consultation on Consumer Protection in the Diamond Sector. Chaired by Nidhi Khare, Chief Commissioner of CCPA, the meeting gathered key industry players, regulatory authorities, and experts to discuss critical issues related to consumer protection, transparency, and ethical practices in the diamond trade.
The consultation, held in New Delhi, focused on the pressing need for standardized terminology and improved disclosure practices within the diamond sector.
Discussions were centered on addressing gaps in the current system that have led to consumer confusion, particularly regarding the distinction between natural diamonds and lab-grown diamonds.
Consumers unknowingly purchasing lab-grown diamonds:
A major concern raised during the consultation was the inconsistent use of terminology in the diamond industry. Stakeholders noted that the lack of clear, standardized terms has created confusion among consumers, particularly when differentiating between natural diamonds and lab-grown diamonds. This has opened the door to misleading practices in the marketplace, with some consumers unknowingly purchasing lab-grown diamonds under the impression that they are buying natural diamonds.
Experts and industry representatives called for stricter regulations to standardize terminology and labeling, ensuring that consumers are provided with accurate information about the products they purchase.
Term “diamond” must exclusively refer to natural diamonds
The meeting also addressed the existing legal and regulatory frameworks that govern the diamond industry. Several key pieces of legislation were highlighted, including:
The Legal Metrology Act, 2009: Section 12 of this Act mandates that the unit of mass for diamonds, pearls, and precious stones be the carat (symbol: c), which is equivalent to 200 milligrams. This standard ensures consistency in weight measurements across the industry.
Bureau of Indian Standards (BIS) IS 15766:2007: This standard stipulates that the term “diamond” must exclusively refer to natural diamonds. Synthetic diamonds cannot be labeled as “diamond” without further qualification and must be explicitly referred to as “synthetic diamonds.” Additionally, synthetic diamonds cannot be graded alongside natural diamonds, ensuring clear distinctions in the marketplace.
Consumer Protection Act, 2019: The Act provides a legal framework to protect consumers from unfair trade practices, ensuring transparent labeling and preventing deceptive practices in the diamond trade. This includes strict guidelines around product descriptions to prevent misleading consumers.
New guidelines for transparency
In an important development, the Central Board of Indirect Taxes and Customs (CBIC) issued Circular No. 21/2024 on October 30, 2024. The circular mandates that all diamonds, whether natural or lab-grown, must be clearly labeled with their origin. If the diamond is lab-grown, the specific production method—whether Chemical Vapor Deposition (CVD), High Pressure High Temperature (HPHT), or another method—must be disclosed. This new regulation aims to provide greater transparency and accountability in the diamond sector, allowing consumers to make more informed purchasing decisions.
Industry Consensus on Ethical Practices
The consultation also revealed a broad industry consensus on the need for ethical marketing practices and consistent terminology to protect consumers. Key recommendations proposed included:
Explicit labeling and certification: All diamonds should be labeled with clear information about their origin (natural or lab-grown) and the method of production for lab-grown diamonds.
Prohibition of misleading terms: The use of terms like “natural” or “genuine” for lab-grown diamonds should be prohibited to prevent consumer deception.
Regulation of diamond testing labs: Stakeholders proposed the establishment of accreditation systems to regulate diamond testing laboratories, ensuring that only credible entities conduct diamond grading and certification.
A Step Toward a Transparent and Consumer-Centric Market
The consultation marked an important step toward establishing a more transparent, accountable, and consumer-friendly diamond market. The CCPA indicated that it will soon release a comprehensive framework based on the recommendations discussed during the meeting, aimed at enhancing consumer protection and ensuring a fairer marketplace for diamonds.
With the introduction of these new guidelines and regulatory measures, stakeholders hope to build greater consumer confidence and foster ethical business practices within the diamond industry, benefiting both consumers and industry players alike.
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