The Diamond Dollar Account, commonly known as DDA, is a special foreign currency account facility granted by the Reserve Bank of India to Indian firms engaged in the import and export of diamonds and coloured gemstone-studded jewellery. These accounts are denominated in dollars and are meant to facilitate seamless international trade in these high-value items. The facility allows exporters to receive payments in foreign currency directly into a designated account, improving liquidity and simplifying foreign exchange management. The regulatory foundation for Diamond Dollar Accounts is rooted in the Foreign Exchange Management Act, 1999, and specifically governed under the Foreign Exchange Management (Foreign Currency Accounts by a Person Resident in India) Regulations. Over time, the RBI has introduced amendments to these regulations to refine eligibility criteria, strengthen monitoring, and align domestic trade practices with international standards. The most recent amendment, dated 29 April 2025, was introduced via Notification F. No. FEMA 10 (R)(6)/2025-RB brings significant changes to the eligibility criteria for opening a Diamond Dollar Account.
Overview of the Sixth Amendment Regulations, 2025
The Sixth Amendment Regulations, 2025, are an update to the principal rules under the Foreign Exchange Management (Foreign Currency Accounts by a Person Resident in India) Regulations. These rules govern the operational framework under which individuals and entities resident in India can hold foreign currency accounts. One of the key components of these regulations is Schedule II, which includes an annexure containing the application form for opening a Diamond Dollar Account. This form outlines the eligibility criteria, required documentation, and compliance procedures for exporters seeking to establish a DDA. With the issuance of the Sixth Amendment, the RBI has modified the tenure of trade experience required for eligibility. The prior requirement of a minimum two-year trading history in diamonds and coloured gemstone-studded jewellery has been extended to three years. This change, while limited in scope to the application process, holds significant implications for both prospective and existing DDA holders. It reflects a more stringent approach to regulatory compliance and trade validation in the precious commodities sector.
Understanding the Previous and Revised Eligibility Criteria
Under the earlier framework, exporter firms and companies applying to open a DDA needed to demonstrate a minimum of two years of continuous trade experience specifically in the export or import of diamonds or gemstone-studded jewellery. This requirement was considered adequate at the time to establish the operational credibility of an applicant and ensure that only genuine traders gained access to foreign currency account facilities. The revised regulation now mandates a three-year minimum track record in the same line of business. The intent is to elevate the eligibility standard, thereby filtering applicants more rigorously and ensuring that only seasoned exporters participate in the DDA framework. This amendment is specifically confined to the annexure of the Schedule II application form and does not alter other associated conditions. The documentation requirements, such as submission of export invoices, shipping bills, Import Export Code (IEC) compliance, and Know Your Customer (KYC) norms, remain unchanged. Applicants will, however, need to demonstrate a complete and uninterrupted trading record covering three financial years to fulfill the new criterion.
Legal and Regulatory Context of the RBI’s Notification
The authority of the Reserve Bank of India to modify and enforce regulations under FEMA is derived from its role as India’s central bank and primary regulator of the foreign exchange market. FEMA empowers the RBI to frame, revise, and enforce rules that govern the conduct of foreign exchange transactions by Indian residents and entities. In the context of foreign currency accounts, the RBI has introduced several amendments over the years to reflect evolving global trade dynamics, address vulnerabilities in the system, and integrate best practices. The Notification F. No. FEMA 10 (R)(6)/2025-RB, issued on 29 April 2025, is part of this continuum. The sixth amendment reflects the RBI’s intent to fortify the compliance ecosystem surrounding high-value export commodities such as diamonds. As part of the larger regulatory landscape, the amendment also aligns with national objectives around anti-money laundering, trade transparency, and curbing foreign exchange-related irregularities.
Policy Objectives Behind the Revised Eligibility Requirement
The RBI’s decision to extend the eligibility period from two to three years for opening Diamond Dollar Accounts stems from multiple policy considerations. One key objective is to enhance trade vigilance. By insisting on a longer operational history, the central bank can ensure that only entities with an established presence in the diamond trade are permitted access to DDAs. This minimizes the risk of misuse by untested or newly formed entities. Another motivation lies in the prevention of financial fraud and money laundering. A three-year track record requirement serves as a safeguard against the use of shell companies or transient business arrangements designed to exploit regulatory gaps for illicit financial flows. It becomes significantly harder for such entities to fabricate or maintain a long-term operational footprint. Additionally, the revision brings India’s regulatory framework closer to global standards. Many countries impose similarly stringent requirements on financial accounts used for high-value trade commodities. By aligning domestic rules with these practices, India reinforces its commitment to clean trade practices and international financial cooperation.
Importance of Trade History in Regulatory Compliance
Trade history plays a pivotal role in the vetting process for foreign currency account eligibility. It provides evidence of an entity’s legitimate participation in international trade and showcases consistency in business operations. Regulatory agencies like the RBI rely on trade documentation such as export invoices, customs shipping bills, GST returns, and banking records to verify the authenticity of applicants. With a three-year requirement in place, firms now need to produce a comprehensive set of such documents for a longer time frame, leaving less room for manipulation or gaps in compliance. This emphasis on historical trading data also ensures that the foreign exchange benefits conferred through DDAs are utilized by exporters who are genuinely contributing to India’s external trade sector. From a risk management perspective, a longer trade history helps banks and regulators assess the creditworthiness, operational soundness, and legal standing of the applicant firm. It becomes a foundational element for onboarding decisions and ongoing monitoring of account activity.
Who Will Be Affected by the New Requirements
The revised rule will primarily affect new applicants seeking to open Diamond Dollar Accounts after the regulation’s effective date. Firms that have been engaged in the diamond or gemstone jewellery business for less than three years will now be ineligible to apply until they complete the minimum required tenure. This could delay business plans or expansion strategies for newer firms, especially those that have seen rapid growth in a shorter period. On the other hand, existing DDA holders are not impacted by this change, as long as they continue to meet all operational and compliance obligations. These firms may carry on with their existing accounts and remain eligible for renewals or continued usage. The amendment may also have downstream implications for banks and financial institutions that serve as Authorized Dealers. They will need to update their internal policies, application checklists, and client advisory processes to incorporate the revised eligibility standard.
Challenges for New Exporters Under the Amended Norms
For startups or new entrants in the diamond and jewellery export segment, the three-year experience requirement presents a significant barrier to early access to foreign currency accounts. These accounts offer critical advantages such as ease of transactions, reduced currency conversion costs, and faster settlement of payments. The inability to access DDAs for the initial three years may affect the cash flow, pricing competitiveness, and operational flexibility of new firms. Moreover, assembling the requisite documentation for a three-year trade history can be administratively challenging, especially for businesses that operate in fragmented or informal markets. The burden of compliance, audit certification, and document submission is considerably higher under the revised rules. While the RBI’s intent is rooted in strengthening regulatory oversight, the industry may call for support mechanisms or transitional provisions to assist newer players in meeting the eligibility criteria without compromising the robustness of the overall framework.
Impact on Existing Exporter Entities with Diamond Dollar Accounts
Existing exporters who already operate a Diamond Dollar Account are not directly impacted by the amended regulation. The three-year trade record requirement only applies to new applicants submitting forms on or after 29 April 2025. Therefore, firms that have maintained DDAs under the earlier two-year criterion can continue to operate these accounts provided they remain compliant with all prevailing regulations. This includes maintaining accurate records of foreign exchange inflows and outflows, adhering to Know Your Customer norms, and fulfilling any reporting requirements set by their authorized dealer banks. These businesses may also need to prepare for additional scrutiny during periodic reviews, especially if there are any red flags or inconsistencies in transactions. While the new amendment does not impose retrospective requirements, banks may gradually begin applying more rigorous due diligence standards to existing DDA holders to maintain consistency across the system. Firms with DDAs should thus ensure that their trade documentation is updated, reconciled, and accessible for review by auditors or regulatory inspectors.
Implications for Authorized Dealer Category-I Banks
Authorized Dealer Category-I banks, which are permitted to handle foreign exchange transactions, including DDA operations, play a critical role in the implementation of the revised regulation. These banks must now update their internal systems, processes, and compliance protocols to reflect the new three-year trade record requirement. This includes modifying the application checklists used by relationship managers, updating client onboarding workflows, and integrating system-based checks that automatically flag applications from firms with less than the required trading history. Training programs must also be conducted for front-office and compliance staff to ensure awareness and uniform application of the amended criteria. Additionally, banks will be responsible for verifying the authenticity of submitted documents, which include audited financials, export invoices, and GST returns spanning three financial years. This may require closer coordination with external auditors, customs departments, and the Directorate General of Foreign Trade. Institutions that fail to incorporate the new standards could face regulatory action or reputational damage in the event of compliance lapses.
Compliance Timelines and Transition Period for Banks and Exporters
The Sixth Amendment to the FEMA (Foreign Currency Accounts) Regulations took effect on 29 April 2025, making the three-year trade record requirement immediately applicable to all new DDA applications from that date onward. Recognizing the need for systemic adaptation, the Reserve Bank of India has advised banks to complete internal updates by 30 June 2025. These updates include issuing circulars to branch offices, configuring onboarding systems, and updating compliance manuals. By mid-May 2025, authorized dealers were expected to inform all concerned departments, including trade finance desks, of the new eligibility requirement. Exporters planning to apply for DDAs are advised to begin preparing immediately by compiling and certifying their trade records for the past three years. This includes obtaining audited financial statements, export documentation, customs clearance records, and tax filings to demonstrate consistent trading activity. The relatively short transition period highlights the importance placed by the RBI on quick adoption and reflects the urgency of reinforcing the regulatory framework for high-value foreign exchange accounts.
Operational Adjustments Needed by Exporters
To qualify under the new eligibility rules, exporters must make several operational adjustments. First, they need to ensure the availability of three years’ worth of complete and verifiable trade documentation. This includes ensuring that all export invoices are properly archived, shipping bills are accessible and cross-referenced with payment receipts, and Goods and Services Tax returns are filed accurately and consistently. Second, these firms must engage with chartered accountants or auditors to compile audit reports that reflect their historical trading activity. Errors, omissions, or discrepancies in the records could result in rejection of the DDA application. Exporters may also need to strengthen their internal compliance mechanisms to track and maintain trade documentation in real time, thereby reducing the effort needed for future regulatory filings. Firms operating in partnership or joint venture formats must ensure that trading activity is correctly attributed to the applying entity and not fragmented across multiple organizations, which could otherwise dilute the three-year qualification history.
Documentation Requirements for New Applications
Applicants under the revised framework must submit a comprehensive set of documents proving their trade activity in the diamond or gemstone-studded jewellery sector for at least three financial years. These documents typically include export invoices demonstrating sales of diamonds or relevant products, shipping bills submitted at the time of export clearance from Indian ports, and GST returns indicating turnover from qualifying trade. Additionally, applicants are expected to submit audited financial statements that detail their revenue sources and validate the authenticity of claimed export volumes. Import Export Code registration is also mandatory and must be active and up to date. The RBI may also expect banks to conduct background checks, customer due diligence, and risk assessments based on this documentation. Firms should also be prepared to respond to clarifications or furnish supplementary records such as purchase invoices, third-party certifications, or bank realization certificates to prove the authenticity and continuity of trade operations over the stated period.
Alignment with International Regulatory Practices
The RBI’s move to impose a three-year trade experience requirement is aligned with international norms governing high-value foreign currency accounts. In many advanced jurisdictions, access to special foreign currency accounts used for trading precious commodities is restricted to entities with a proven history of compliance, trading performance, and financial stability. These global standards are designed to reduce the misuse of such accounts for money laundering, trade-based manipulation, or tax evasion. By extending the trade record requirement, the RBI brings India’s foreign exchange controls into closer conformity with these global frameworks. This strengthens the credibility of Indian exporters in international markets and supports the country’s broader objectives around clean trade, responsible finance, and global cooperation. It also signals to trading partners, foreign regulators, and investors that India is committed to building a transparent and well-regulated foreign exchange ecosystem, particularly in sensitive sectors like diamonds and precious stones, which are often targeted for illicit financial flows.
Rationale for Focusing on the Diamond Trade Sector
The diamond trade, while lucrative, is also associated with elevated risks of financial irregularities, including trade-based money laundering, invoice manipulation, and the use of shell companies. Unlike many other export commodities, diamonds and gemstones are small in volume but extremely high in value, making them uniquely vulnerable to illicit financial flows. Historically, global financial institutions and watchdogs have raised concerns about the use of diamond trade networks for moving funds across jurisdictions. Given this background, the RBI’s decision to impose stricter eligibility criteria for Diamond Dollar Accounts is both timely and necessary. It aims to deter fly-by-night operators from gaining access to dollar accounts, reduce the misuse of foreign exchange benefits, and ensure that only credible, long-standing players participate in this sensitive segment. The regulation reinforces the principle that access to foreign exchange infrastructure must be reserved for entities that demonstrate a consistent and lawful engagement in the targeted line of business.
Implications for the Indian Gem and Jewellery Export Industry
The Indian gem and jewellery export sector, which accounts for a significant share of the country’s total exports, may see mixed reactions to the amended DDA rules. On one hand, established exporters with a long track record will likely welcome the move, as it curbs unfair competition from newly formed or potentially fraudulent entities. On the other hand, smaller firms or startups that have entered the market in recent years may find the rule restrictive and a barrier to growth. Some may argue that the regulation could slow down the onboarding of emerging players who are genuinely committed to ethical and profitable trade. The net effect on the industry will depend on how effectively the transition is managed by banks and how well exporters adapt to the new documentation and compliance burdens. Industry associations may also seek clarification or propose mechanisms for transitional support, particularly for firms on the cusp of completing the three-year eligibility mark.
Challenges in Implementing the Revised Framework
Implementing the revised eligibility requirement for Diamond Dollar Accounts presents several logistical and operational challenges for both exporters and banks. For exporters, compiling and certifying three years of trade history may not be straightforward, especially for businesses that have undergone mergers, restructuring, or changes in business format. Variations in accounting systems, document management practices, and audit standards across firms can create inconsistencies in the submission of evidence. Smaller firms may lack the in-house capacity to prepare extensive documentation and may be required to hire external professionals, increasing compliance costs. For banks, the increased verification burden may require additional staffing, system upgrades, and revised audit protocols. They must ensure that documentation provided by applicants is cross-verified for accuracy and relevance, which may slow down the DDA approval process. The RBI’s expectation that banks apply rigorous vetting standards also places pressure on financial institutions to enhance internal controls and monitoring systems. These operational burdens could lead to longer processing times and reduced efficiency unless supported by adequate resources and automation tools.
Technology and Process Upgrades in Banks
To comply with the new regulation, banks will need to undertake significant technology and process upgrades. This includes updating their core banking platforms to include checks that automatically screen DDA applications for the required three-year trade history. Relationship managers must be equipped with digital checklists and updated workflows to ensure that applications from ineligible firms are flagged early in the process. Banks may also integrate trade data with third-party verification systems or government databases to validate export history. Automated alerts and dashboards can help compliance teams track applications in real time and identify gaps in documentation or inconsistencies in trading records. Additionally, digital document repositories will be necessary to store large volumes of trade records submitted by exporters. Banks may also consider using optical character recognition and AI-based tools to analyze invoices, GST returns, and shipping bills for authenticity and accuracy. The success of these upgrades will depend on timely execution, staff training, and coordination between IT, compliance, and trade finance departments.
Legal and Audit Considerations for Exporters
From a legal and audit perspective, exporters applying for a Diamond Dollar Account under the revised framework must ensure that their trading records are accurate, consistent, and auditable. Legal compliance involves not only maintaining proper records but also ensuring that documentation is aligned with applicable tax, customs, and foreign trade laws. Export invoices must specify the commodity, pricing, buyer details, and payment terms. Shipping bills must correspond with the invoices and show evidence of customs clearance. Any discrepancies between different records could raise red flags during bank verification. In addition, GST returns must be filed consistently and must match the declared turnover from diamond or gemstone jewellery exports. Exporters are advised to work closely with their chartered accountants to reconcile discrepancies, prepare audit reports, and certify trading activity for the last three years. Any misreporting, unverified claims, or undocumented activity could result in the rejection of the DDA application and potentially expose the applicant to regulatory scrutiny or penalties.
Role of Industry Associations in Facilitating Compliance
Industry bodies and trade associations have an important role to play in helping their members understand and comply with the revised eligibility norms for DDAs. These organizations can serve as information hubs, offering guidance on the updated application process, documentation standards, and best practices for maintaining trade records. They may also organize training sessions, webinars, and outreach programs for exporters and bank staff to facilitate smooth implementation. Additionally, industry associations can collect feedback from stakeholders and engage in dialogue with regulatory authorities to address concerns or seek clarifications. In cases where exporters face genuine hardship due to recent entry into the market or administrative barriers, associations may advocate for transitional provisions or a phased implementation approach. They can also assist members in standardizing documentation formats, sharing sample templates, and providing access to legal and audit professionals who specialize in trade compliance. By bridging the gap between regulators and industry participants, trade associations can significantly improve adherence to the new rules.
Long-Term Benefits of the New Eligibility Requirement
Despite short-term difficulties, the revised eligibility requirement is likely to yield significant long-term benefits for the Indian diamond and gemstone export sector. The three-year trade record rule acts as a filter that restricts access to foreign currency accounts to firms with an established reputation and proven operational history. This builds greater trust among foreign buyers, banks, and regulatory agencies, thereby enhancing India’s image as a responsible trading partner. Over time, the increased due diligence will reduce incidents of fraud, improve the accuracy of trade data, and strengthen the financial ecosystem supporting exports. The policy also promotes better business practices among exporters, encouraging them to maintain complete records, undergo regular audits, and adopt transparent accounting methods. Firms that consistently meet these higher standards will be better positioned to access credit, attract investment, and expand globally. In this way, the regulation not only safeguards the foreign exchange system but also incentivizes professionalism and accountability across the trade community.
Comparison with Similar International Trade Account Policies
In comparing India’s updated DDA rules with similar international policies, it becomes evident that the RBI’s approach aligns with best practices followed in leading trade-focused jurisdictions. Countries such as the United States, the United Kingdom, and Belgium—home to major diamond trading centers—maintain stringent requirements for companies seeking access to foreign currency accounts and trade facilities in the precious commodities sector. These jurisdictions often mandate several years of proven trade activity, background checks on key personnel, detailed financial disclosures, and periodic audits. Some also require certification from trade bodies or submission of compliance declarations under anti-money laundering laws. By raising the eligibility bar, India is effectively harmonizing its foreign exchange regulations with these international frameworks. This not only enhances regulatory credibility but also reduces the likelihood of Indian firms facing scrutiny or restrictions when transacting in global markets. Indian exporters meeting the new DDA criteria will thus be better equipped to comply with international compliance expectations, improving their competitiveness and market access.
Feedback from the Exporter Community
Since the release of the amended regulation, feedback from the exporter community has been mixed. Large and mid-sized exporters, who already possess the requisite trade history, have generally welcomed the move as a way to strengthen credibility and weed out non-serious players. They see the regulation as a necessary step to maintain the integrity of the DDA system and reduce misuse. However, smaller firms, especially those recently entering the market, have expressed concerns about the rigidity of the rule and its impact on business expansion plans. Some exporters have called for flexibility in the form of provisional DDA access with stricter monitoring or phased access based on milestone achievements. Others have sought clarity on documentation formats and the treatment of business reorganizations such as mergers or changes in ownership. While the overall industry sentiment supports the objective of the regulation, there is a growing demand for regulatory guidance, transitional support, and more detailed implementation instructions to minimize disruption.
Preparation Checklist for Prospective DDA Applicants
To successfully apply for a Diamond Dollar Account under the revised regulation, exporters should begin preparations well in advance. First, they must ensure that they have maintained uninterrupted trade activity in diamonds or coloured gemstone jewellery for at least three financial years. Second, they should gather export invoices that identify the nature, quantity, and value of goods sold, along with corresponding shipping bills that demonstrate the actual movement of goods. Third, audited financial statements for the relevant years must be obtained from a qualified chartered accountant, and these statements should explicitly confirm revenue from eligible exports. Fourth, GST returns and tax filings should be compiled and cross-checked against the invoices and financial statements to ensure consistency. Fifth, the Import Export Code registration must be current and free of discrepancies. Finally, applicants should consult their bank’s relationship manager to verify any institution-specific documentation requirements or procedural updates that may have been introduced after the amendment.
Regulatory Monitoring and Oversight Post Implementation
Once the three-year trade record requirement is fully implemented, the Reserve Bank of India is expected to increase its oversight activities to ensure consistent application of the new rule across all authorized banks. This will likely include periodic audits, inspections, and submission of compliance reports by banks to confirm that only eligible exporters are being granted access to Diamond Dollar Accounts. Any discrepancies or lapses identified during such reviews could result in regulatory action against banks, including fines, enhanced supervision, or temporary suspension of foreign exchange handling privileges. Banks may be required to furnish details of all DDA applications received after the effective date of the amendment and submit justification for approvals or rejections. Exporters, too, could face scrutiny, particularly if their documentation appears inconsistent or their trading history is not well supported by financial records. The increased level of monitoring is part of a broader shift toward a more disciplined and transparent foreign exchange management system.
Long-Term Institutional Impact on Banks and Regulators
Over time, the amendment is expected to bring about structural improvements in the way banks and regulators handle trade-related foreign currency accounts. Banks will invest in more advanced compliance infrastructure, including document verification tools, centralized audit systems, and real-time monitoring dashboards. These capabilities will reduce manual errors and improve processing times once initial transition hurdles are addressed. For the RBI and other regulatory agencies, the stricter eligibility rule will improve data quality, reduce instances of fraud, and enhance India’s compliance posture in global financial forums. It will also make it easier for authorities to identify unusual trade patterns, suspicious transactions, or inconsistencies in export declarations. These benefits extend beyond the diamond trade sector and contribute to the strengthening of the overall trade finance ecosystem. By encouraging systemic improvements, the amendment lays the groundwork for future regulatory innovations and digital transformation in the domain of export finance and foreign currency management.
Opportunities for Digital Compliance Solutions
The introduction of the revised rule also opens new opportunities for the adoption of digital compliance tools that can assist both banks and exporters in managing regulatory requirements. These may include cloud-based platforms for document submission, automated invoice validation systems, and trade tracking dashboards that integrate data from customs, tax authorities, and banks. Fintech companies may develop solutions specifically tailored for exporters in the gem and jewellery sector, offering tools that help maintain audit trails, generate real-time reports, and facilitate quick DDA application reviews. Blockchain-based systems could be used in the future to authenticate export transactions and create immutable records that simplify compliance verification. For exporters, digital tools can reduce the burden of document storage, eliminate duplication of work, and speed up communication with bank representatives. Adoption of these technologies will not only improve regulatory compliance but also enhance business efficiency, making it easier for firms to participate in international markets with confidence and reliability.
Strategic Implications for Exporters and Trade Policy
The new eligibility rule has strategic implications for India’s broader export policy and trade competitiveness. By enforcing higher entry barriers, the RBI effectively promotes greater professionalism, transparency, and resilience in the export sector. This aligns with national trade objectives that prioritize quality over quantity, reduce vulnerability to financial crimes, and encourage sustainable business models. For exporters, the change represents an opportunity to strengthen internal governance, adopt global best practices, and differentiate themselves through operational excellence. In a competitive global environment, compliance becomes a value proposition that can attract international buyers, investors, and partners. For trade policymakers, the amendment reinforces the importance of coherence between financial regulations and export promotion strategies. It underscores the need to balance ease of doing business with safeguards against systemic risks. Over time, these strategic outcomes contribute to a more robust and globally credible export framework for high-value commodities.
Risk Mitigation and Prevention of Illicit Financial Flows
One of the most important objectives of the amended regulation is to prevent illicit financial flows through the misuse of Diamond Dollar Accounts. High-value commodities like diamonds are particularly susceptible to trade-based money laundering, where goods are over- or under-invoiced to move money across borders without detection. By limiting access to DDAs to firms with a three-year verified trading history, the RBI effectively reduces the pool of entities that could potentially exploit the system for such activities. The documentation requirements serve as a strong deterrent against shell companies or fraudulent entities attempting to manipulate trade records. Banks are also better equipped to perform customer due diligence and report suspicious activities under the Prevention of Money Laundering Act. This policy-driven risk mitigation enhances India’s ability to comply with global anti-money laundering standards and improves its standing in evaluations conducted by international financial watchdogs. As a result, the financial system becomes safer, more trustworthy, and more resilient to external threats.
Encouragement for Formalization in the Gem and Jewellery Sector
The gem and jewellery sector in India includes a wide range of participants, from large export houses to small and medium enterprises operating in informal setups. The new eligibility requirement creates an incentive for firms to formalize their operations, maintain proper records, and engage in regulated trade practices. Firms that wish to eventually qualify for a Diamond Dollar Account must now plan their business operations with a long-term view, including maintaining financial discipline, undergoing audits, and establishing transparent business relationships. This shift toward formalization has wider economic benefits, including improved tax compliance, better access to credit, and increased participation in government support programs. Over time, the industry may see a decline in informal trade practices and an increase in organized, professionally managed businesses. This transition will also improve the sector’s ability to attract foreign investment, secure international certifications, and meet evolving environmental, social, and governance expectations from global buyers.
Future Outlook for Regulatory Developments
The RBI’s decision to revise the eligibility requirement for Diamond Dollar Accounts may signal future regulatory developments in the broader foreign exchange and export finance space. Other high-risk sectors, such as bullion, antique trade, or certain segments of electronic exports, may see similar reforms aimed at tightening entry conditions and improving monitoring mechanisms. Additionally, the RBI may issue detailed operational guidelines or FAQs to clarify the application of the new rule, especially in complex cases involving joint ventures, business reorganizations, or exports made through subsidiaries. There may also be new reporting formats introduced to improve transparency and reduce ambiguity in trade declarations. Banks and exporters should stay updated with circulars, master directions, and notifications from regulatory authorities to ensure continuous compliance. The trend toward higher documentation standards, real-time reporting, and digital verifiability is likely to continue, and businesses that invest in compliance readiness will be better positioned to navigate this evolving regulatory landscape.
Conclusion
The amendment to the Diamond Dollar Account eligibility rules, increasing the required trade experience from two years to three, marks a significant development in India’s approach to regulating foreign currency accounts used in high-value exports. By targeting the diamond and gemstone trade sector, the RBI aims to strengthen trade discipline, prevent financial irregularities, and align domestic policies with international norms. While the change introduces challenges for new entrants and increases compliance responsibilities for exporters and banks, it also brings long-term benefits such as improved credibility, reduced risk, and enhanced competitiveness. The success of this reform depends on the proactive engagement of all stakeholders, including exporters, banks, trade associations, and regulators. With the right tools, systems, and collaborative efforts, the transition to the new regime can be achieved smoothly, ultimately contributing to a safer and more transparent trade environment for India.