CCPA to bring regulatory framework for diamond industry to protect consumers interest

The Central Consumer Protection Authority (CCPA) will soon release guidelines on diamond sector to ensure explicit labelling and certification of all diamonds and prohibit the use of misleading terms in trade.

The CCPA has organised a stakeholder consultation on consumer protection in the diamond sector to deliberate on the use of appropriate terminology for diamonds, an official statement said on Tuesday.

The consultation, chaired by Nidhi Khare, Chief Commissioner, Central Consumer Protection Authority (CCPA), brought together key industry stakeholders and experts. "The CCPA will soon release a robust framework to ensure transparency, accountability, and consumer protection across the diamond industry," the statement said.

The meeting addressed critical concerns regarding the lack of standardised 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 pointed out.

Industry consensus emphasised the need for ethical marketing practices and consistent terminology to enhance consumer protection.

"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," the statement said.

The consultation was a significant step toward building a transparent and consumer-centric diamond market. During the consultation, the broad key aspects and prevailing Legal and Regulatory frameworks were discussed in detail.

Citing an example, the CCPA said that 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 standardised measurements for consistency in commercial transactions across the diamond industry.

The Bureau of Indian Standards (BIS) Standard IS 15766:2007 mandates that the term "diamond" alone must exclusively refer to natural diamonds. Synthetic diamonds cannot be labelled as "diamond" without qualification and must be explicitly referred to as “synthetic diamonds,” irrespective of the production method or material used.

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 to safeguard consumer interests by preventing unfair trade practices and ensuring transparent labelling in the diamond industry is provided.

This prohibits misleading descriptions or omissions that may confuse consumers.

Further, Central Board of Indirect Taxes and Custom (CBIC) reinforced these measures, 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.