Central Consumer Protection Authority Hosts Stakeholder Consultation to Draft Guidelines for Protection of Consumer Interest in Diamond Sector

Industry Consensus Highlights Urgent Need for Clear Differentiation between Natural and Lab-Grown Diamonds

Guidelines to Eliminate Confusion by Standardizing Terminology for Natural and Lab-Grown Diamonds

The Central Consumer Protection Authority (CCPA) recently hosted a Stakeholder Consultation focused on improving consumer protection within the diamond sector. Chaired by Smt. Nidhi Khare, Chief Commissioner of the CCPA, the consultation aimed to address critical issues related to misleading terminology, lack of standardization, and consumer confusion surrounding natural and lab-grown diamonds.

The diamond industry, currently marred by inconsistent terminology and unclear labeling practices, has prompted urgent calls for reform. The consultation brought together key industry experts, stakeholders, and legal authorities to find solutions that would ensure clarity and transparency in the diamond market.

Key Discussion Points:

One of the major topics discussed was the need for clear differentiation between natural diamonds and lab-grown diamonds. The absence of standardized terminology has led to widespread consumer confusion, with both product types often being marketed without adequate distinction.

Legal and Regulatory Frameworks: The consultation explored existing frameworks that govern the diamond industry. The Legal Metrology Act, 2009, outlines the unit of mass for diamonds and precious stones as the carat (symbol: c), standardized at 200 milligrams. This ensures consistency in commercial transactions. Additionally, BIS Standard IS 15766:2007 mandates that the term “diamond” should exclusively refer to natural diamonds. Synthetic diamonds must be labeled clearly as “synthetic” or “lab-grown” to prevent misleading consumers.

Under the Consumer Protection Act, 2019, the CCPA emphasized the importance of preventing unfair trade practices by ensuring transparent and accurate labeling. This legal framework prohibits misleading descriptions or omissions that could confuse consumers.

Industry Consensus and Proposed Guidelines:

The industry consensus underscored the urgent need for ethical marketing practices and a consistent approach to terminology. Key proposals included:

• Explicit Labeling & Certification: All diamonds must be clearly labeled with their origin and production method, whether natural or lab-grown.
• Prohibition of Misleading Terms: Terms such as “natural” or “genuine” should not be used for lab-grown diamonds.
• Accreditation Systems: Diamond testing laboratories should be accredited to ensure standardization and prevent the rise of unregulated entities.
• Clear Production Method Declaration: Lab-grown diamonds should be accompanied by clear information regarding their production methods, such as Chemical Vapor Deposition (CVD) or High Pressure High Temperature (HPHT).

Moving Forward:

The Central Board of Indirect Taxes and Customs (CBIC), through Circular No. 21/2024 (October 30, 2024), has reinforced these regulations. The circular mandates the explicit declaration of whether a diamond is natural or lab-grown, and requires that the production method for lab-grown diamonds be specified. These regulations aim to bring greater transparency and accountability to the diamond market.

The CCPA’s efforts reflect a significant step towards building a more transparent and consumer-friendly diamond industry. A set of comprehensive guidelines will soon be released, ensuring that the diamond sector operates with clarity, ethical practices, and enhanced consumer protection.

Conclusion:

As consumer interest in both natural and lab-grown diamonds grows, the diamond sector must adapt to meet expectations for transparency and accuracy. The proposed guidelines will help protect consumers, eliminate confusion, and set clear standards for the marketing of diamonds in India and beyond.

News Source: pib.gov.in

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