CCPA moves to standardize diamond labelling to protect consumers

New Delhi: The Central Consumer Protection Authority (CCPA) is set to introduce guidelines aimed at eliminating confusion over whether a stone is lab-made or mined. 

A CCPA stakeholder consultation, chaired by its chief commissioner Nidhi Khare on Monday, focused on the growing need for transparency and accountability in differentiating natural diamonds from lab-grown ones, addressing a long-standing concern in the industry, the department of consumer affairs said on Tuesday.

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The consultation brought together industry leaders, regulatory experts and consumer rights advocates, all of whom agreed on the urgency of addressing misleading marketing practices in the sector, it said.

The absence of standardized terminology, coupled with inadequate disclosure about the origin and production of diamonds, has led to widespread confusion among consumers.

“Consumers deserve to know exactly what they are paying for,” Khare told Mint.

“The lack of clarity not only misleads buyers but also damages trust in the entire diamond market, which has always been built on exclusivity and authenticity.” 

Stress on explicit labelling

During the discussion, industry experts highlighted the importance of explicitly labelling diamonds as natural or lab-grown, with further details about the production method if it's lab-grown. 

Misleading terms such as "natural" or "genuine" for lab-grown diamonds were identified as a critical issue that needs immediate redressal. Stakeholders also underscored the necessity of regulating diamond-testing laboratories, many of which currently operate without accreditation.

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The CCPA deliberated on existing legal frameworks, including the Legal Metrology Act, 2009, which defines carats as the unit of measurement for diamonds, and the Consumer Protection Act, 2019, which prohibits misleading descriptions.

Khare told the meeting that these laws provide a strong foundation for ensuring consumer protection but need to be reinforced with specific sectoral guidelines.

“Our aim is to ensure that the diamond market operates with the highest standards of transparency and fairness, so consumers can make informed decisions,” she said.

Draft to be out in weeks

The CCPA is expected to release the draft guidelines in the coming weeks. These will likely include mandatory certification of all diamonds, explicit labelling requirements, and measures to regulate testing laboratories. 

With the diamond market undergoing rapid transformation, these steps are seen as essential to maintaining India’s leadership in the sector while ensuring consumers are protected.

The standards set by the Bureau of Indian Standards (BIS) were also discussed, particularly the requirement that the term "diamond" should exclusively refer to natural diamonds, with synthetic versions explicitly labelled as such.

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A recent circular issued by the Central Board of Indirect Taxes and Customs (CBIC) further emphasized the need for disclosure, mandating the declaration of a diamond’s origin and production method.

India, a global leader in diamond processing and exports, stands to benefit significantly from these proposed guidelines.

“The proposed new norms will enhance consumer confidence in both domestic and international markets," said Ashim Sanyal, CEO, ConsumerVoice.