Nearly 18 months after huge quantity of lab-grown diamonds were detected from two Mumbai-based diamond companies, the industry is again flooded with messages on the social media about the involvement of few leading diamond companies including the Diamond Trading Company (DTC) sightholders in the illegal practice of mixing synthetics with natural diamond parcels from the past two weeks.

Following the messages, Gems and Jewellery Export Promotion Council (GJEPC) and the Surat Diamond Association (SDA) have announced stringent legal action against those caught selling mixed diamonds in the market.

In a joint statement issued on Wednesday, the GJEPC and SDA clarified that various pro-active steps have been initiated to curb the menace. An extensive survey and research was conducted in association with AT Kearney & BONAS which showed that with the current production technology, the gem quality synthetic diamond rough production is less than 3,50,000 carats when compared to over 125 million carat production of natural diamond. Thus, with this type of production quantity, the undisclosed mixing, if there is any, is on a fairly small scale.

"Certain unscrupulous elements have created havoc in the industry from the past two weeks. It's a calculated move to tarnish the image of leading diamond companies. We request the diamantaires in India and industry people across the global to stay away from such rumours," says Vipul Shah, chairman, GJEPC.

According to Shah, diamond detection and resource centres have been set-up by the GJEPC at Indian Diamond Institute (IDI) at Surat and Bharat Diamond Bourse (BDB) in Mumbai to detect the mixing.

Talking about action, Dinesh Navadia, president, SDA said, "An industry meeting was held on Tuesday and it has been unanimously decided to initiate stringent legal action against those caught selling the lab-grown diamonds mixed with natural diamonds and manufacturing lab-grown diamonds without disclosure. We want the government to frame a special law for such illegal practice to stop people from indulging in such activities."

The GJEPC and SDA have jointly urged the state and the central governments for introducing separate Harmonised System (HS) code and duty structure right from import duty to VAT for natural and lab-grown diamonds, so as to create differentiation at each level for the benefit of customers and integrity of the Indian diamond industry.