Fake Diamonds Flood Bangladesh Market as Legal Imports Nearly Vanish
Bangladesh’s diamond market has grown to an estimated Tk11,000 crore despite legal imports of diamonds and diamond jewellery falling to almost zero since 2018, raising concerns over smuggling and the sale of lab-grown and imitation stones as genuine diamonds.
Hundreds of jewellery shops across the country continue to sell diamond products even though Bangladesh has neither diamond mines nor domestic diamond production. Official trade data show that the country recorded virtually no legal imports of diamonds or diamond jewellery in 2024 and 2025.
Industry estimates, however, suggest that the domestic diamond jewellery market has expanded from around Tk5,000 crore annually in 2019 to more than Tk11,000 crore in recent years.
An investigation and information from industry organisations indicate that a significant portion of the market may be supplied through smuggling, while lab-grown diamonds, moissanite and zircon are also reportedly being sold as natural diamonds.
Legal Imports Almost Disappear
Bangladesh’s diamond industry once showed significant export potential. Brilliant Diamonds Ltd of Savar exported its first polished diamonds to Belgium in 2007, followed by companies including Renaissance Jewellery and Diamond World.
Between 2007 and 2018, Bangladesh earned around $39.6 million from diamond exports, with diamond consignments reportedly being flown out of the country almost every week.
During the same period, Bangladesh imported diamonds and diamond jewellery worth around $9.35 million, with India accounting for approximately 87 percent of the imports.
In 2018, Diamond World and several other companies imported diamonds worth around $140,000. No significant legal import of diamonds or diamond jewellery has been recorded since then.
Over the past eight years, legal diamond imports have reportedly remained below Tk1 million, largely for industrial purposes.
Smuggling Seen as Major Source
Industry insiders say high import duties and restrictions have contributed to the growth of illegal diamond trading.
Diamonds cannot be brought into Bangladesh by air under baggage rules. Importers also face duties of nearly 89 percent on rough diamonds without bond facilities and around 151 percent on polished diamonds.
According to the Bangladesh Jewellers Association (BAJUS), diamonds and diamond jewellery worth around Tk30 crore enter Bangladesh illegally every day, amounting to nearly Tk10,950 crore annually.
Industry sources say Surat in India, one of the world’s largest diamond cutting and polishing hubs, is a major source of diamonds allegedly smuggled into Bangladesh through border routes.
Several seizures by Border Guard Bangladesh (BGB) have highlighted the scale of the alleged trade.
On April 2, BGB seized 155.76 grams of diamonds and foreign currency worth around Tk6.62 crore from an Indian national in Jashore.
On January 30, 2025, BGB arrested a suspected smuggler in the Panchbhulote border area of Jashore and recovered diamond jewellery worth around Tk10 crore.
In 2021, authorities also seized 144 pieces of diamond jewellery worth nearly Tk2 crore in Satkhira.
Concerns Over Fake and Lab-Grown Diamonds
Alongside smuggled natural diamonds, imitation stones such as moissanite and zircon, as well as lab-grown diamonds, are reportedly entering the market and in some cases being marketed as natural stones.
A one-carat natural diamond can cost more than Tk83,000 in Bangladesh, making extremely low-priced diamond jewellery a potential warning sign for consumers.
Solitaire Gemological Laboratories (SGL), an international gem-testing laboratory headquartered in London and New York, began operations in Bangladesh in 2022. Its Dhaka laboratory tests diamonds and issues certificates for genuine stones, including engraved certificate numbers.
Industry insiders say its testing has identified both genuine and imitation stones in the market.
Diamond World Faces Allegations
Diamond World and its owner Dilip Kumar Agarwala have come under scrutiny over allegations related to the diamond trade.
The company operates dozens of showrooms across Bangladesh. However, records cited in a money-laundering case reportedly show limited evidence of legal diamond imports.
The Criminal Investigation Department (CID) filed a Tk678-crore money-laundering case against Agarwala in November 2025, accusing him of purchasing smuggled gold and diamonds, generating illegal profits and laundering the proceeds.
According to case documents, the company legally imported goods worth Tk38.47 crore through letters of credit between 2006 and 2024. Investigators also questioned the absence of legal documentation relating to the purchase of gold and diamonds worth Tk678 crore from the domestic market.
Separate allegations involving illegal assets, suspicious transactions and VAT evasion have also been brought against Agarwala and his wife.
Jewellery Theft Case Raises Further Questions
In a separate case, a court placed two women on five-day remand over allegations that they stole and misappropriated diamond and gold jewellery from an outlet.
Additional Chief Metropolitan Magistrate Safatullah of Dhaka granted the remand on July 13 following a case filed by Mohammad Khayez Ahmad of NJ Diamonds, an affiliate of Northern University Bangladesh Trust, with Banani Police Station on July 8.
According to the case statement, the two employees allegedly worked with unidentified accomplices to replace genuine diamond jewellery with replicas and gradually steal the original items between April 27, 2024, and July 8, 2026.
The company also alleged that the group had links to diamond smuggling operations from India and Dubai.
Sector Still Holds Export Potential
Despite the challenges, industry insiders believe Bangladesh could develop a significant export-oriented diamond jewellery sector with appropriate policy support.
Malabar Gold & Diamonds, in partnership with Nitl-Niloy Group, took an initiative in 2022 to establish a factory in Madanpur, Narayanganj, to manufacture gold and diamond jewellery for both export and the domestic market. However, information on the facility’s full-scale operations in recent years remains limited.
Bangladesh has a small number of diamond cutting and polishing facilities and a large pool of skilled jewellery craftsmen.
Industry representatives believe lower duties on rough diamonds, easier access to bond facilities and stronger export incentives could help revive the sector.
The global polished diamond export market is estimated at around $10 billion, with India holding a major share.
New NBR Rules Target Seized Precious Stones
The National Board of Revenue (NBR) recently issued new rules aimed at making the disposal of uncleared, seized and confiscated goods more transparent and efficient.
The Standing Order on the Disposal Procedure for Uncleared or Seized and Confiscated Goods on Charges of Smuggling, 2026, issued on August 17, includes specific provisions for gold, silver, platinum, diamonds, jewellery and foreign currencies.
Under the new rules, recognised testing organisations must certify seized precious items. If certification cannot be obtained, the items must temporarily be deposited with Bangladesh Bank.
Authorities must transport such goods under police escort to the nearest Bangladesh Bank or treasury bank on an urgent basis. If judicial proceedings remain unresolved for two months, the items must be deposited with Bangladesh Bank.
The new procedure is expected to strengthen oversight and transparency in the handling and disposal of seized diamonds and other precious stones.
BAJUS Calls for Stronger Monitoring
Anwar Hossain, president of the Bangladesh Jewellery Manufacturers and Export Association and spokesperson for BAJUS, said the continued availability of diamonds despite the absence of significant legal imports raises serious concerns about the integrity of the market.
He alleged that some unscrupulous traders are involved in illegal diamond trading and urged authorities to strengthen monitoring and take action against those responsible.
“There have been no significant legal diamond imports since 2018, yet diamond products remain widely available in the market,” Hossain said.
He said the situation indicates that diamonds are entering Bangladesh through illegal channels.
“We do not want products to enter through smuggling. It is the state’s responsibility to ensure that ordinary people are not cheated and receive genuine products,” he added.
Hossain also warned against selling fake or lab-grown diamonds as natural stones. He advised consumers to verify certification before purchasing diamond jewellery and called for regular monitoring by agencies including the Directorate of National Consumers’ Right Protection.
He said the jewellery industry is already facing difficulties because of sharp fluctuations in gold prices, global economic uncertainty and geopolitical tensions.
The central question remains how a diamond market estimated at more than Tk11,000 crore continues to operate when legal imports and exports have almost disappeared.
Industry insiders say the answer appears to involve a combination of alleged smuggling, tax evasion and the circulation of imitation and lab-grown diamonds.
