Bangladesh’s diamond market has grown into a business worth more than 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-made stones as genuine diamonds.

A jewellery shop at Shyamoli Square Shopping Mall recently advertised diamond nose pins on Facebook for just Tk4,999, offering special discounts and gifts with each purchase.

One customer, Sadia Sultana, commented on the post that she would buy one if it were a genuine diamond but feared it might not be authentic. In reply, the shop claimed that its diamonds were “100% natural” and legally sourced from South Africa.

The shop is not an isolated case. Hundreds of jewellery businesses across the country sell diamond jewellery, although Bangladesh has neither diamond mines nor domestic diamond production. Official import data also show that legal diamond imports have virtually stopped since 2018.

According to updated import and export data, Bangladesh recorded almost no diamond imports in 2024 and 2025. Yet industry estimates put the domestic diamond jewellery market at more than Tk11,000 crore.

An investigation by the media and information from several organisations indicates that a significant portion of the market relies on smuggled diamonds, while lab-grown and imitation stones also enter the market as genuine diamonds.

Experts say most smuggled diamond consignments escape detection, with some alleging that weaknesses in enforcement allow the illegal trade to continue.

From a promising export sector to near-zero imports

Bangladesh’s diamond industry once showed strong export potential. Brilliant Diamonds Ltd of Savar exported its first polished diamonds to Belgium in 2007. Renaissance Jewellery and Diamond World later joined the export business.

Between 2007 and 2018, Bangladesh earned around $39.6 million from diamond exports. At the time, diamond consignments were flown out of the country almost every week.

The import sector also remained active. Between 2003 and 2018, Bangladesh imported diamonds and diamond jewellery worth $9.35 million, with India accounting for 87 % 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 amounted to less than Tk1 million, mainly for industrial purposes.

Yet the market continued to expand from 2019, with hundreds of diamond and jewellery shops selling diamond products. Although no official market-size data are available, traders estimate that the market has grown from around Tk5,000 crore a year to more than Tk11,000 crore in recent years.

Smuggling emerges as the main source

Diamonds cannot be brought into Bangladesh by air under the baggage rules. Importers also face duties of nearly 89% on rough diamonds without bond facilities and around 151% on polished diamonds.

Industry insiders say the high duties encourage illegal imports. Over the past two decades, the government has collected only around Tk12 crore in revenue from diamond imports.

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 a year.

Traders say India’s Surat, the world’s largest diamond cutting and polishing hub, is a major source of smuggled diamonds entering Bangladesh through the border.

Border Guard Bangladesh (BGB) seizures have also highlighted the scale of the trade.

On 2 April, BGB seized diamonds weighing 155.76 grams and foreign currency worth around Tk6.62 crore from an Indian national in Jashore.

On 30 January 2025, BGB arrested a suspected smuggler with diamond jewellery worth around Tk10 crore in the Panchbhulote border area of Jashore.

In 2021, authorities seized 144 pieces of diamond jewellery worth nearly Tk2 crore in Satkhira. BGB has reported further diamond seizures in other operations.

Imitation stones add to the problem

Alongside smuggled genuine diamonds, imitation stones such as moissanite and zircon, as well as lab-grown diamonds, are reportedly being sold as natural diamonds.

A one-carat, or 0.2-gram, natural diamond can cost more than Tk83,000 in Bangladesh. Therefore, shops selling a diamond nose pin for Tk5,000 or less raise serious questions about the authenticity of the stone.

Solitaire Gemological Laboratories (SGL), an international gem-testing laboratory headquartered in London and New York, began operations in Bangladesh in 2022. Its laboratory in Banglamotor, Dhaka, tests diamonds and issues certificates, including engraved certificate numbers for genuine stones.

Industry insiders say its tests have identified both genuine and imitation stones.

Diamond World under scrutiny

Diamond World and its owner Dilip Kumar Agarwala have emerged as a major focus of allegations surrounding the diamond trade.

The company operates dozens of showrooms across Bangladesh and handles transactions worth crores of taka daily. However, records show little 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 buying smuggled gold and diamonds and generating illegal profits before laundering the proceeds.

Between 2006 and 2024, the company legally imported goods worth only Tk38.47 crore through letters of credit, according to the case documents. Investigators also questioned the lack of legal documentation for its purchase of gold and diamonds worth Tk678 crore from the local market.

Cases involving alleged illegal assets, suspicious transactions and VAT evasion have also been filed against Agarwala and his wife.

Diamond sellers have additionally faced long-standing allegations of marketing moissanite or zircon as genuine diamonds.

In a separate case, a court recently placed two women on five-day remand over allegations of stealing and misappropriating diamond and gold jewellery from an outlet.

Additional Chief Metropolitan Magistrate Safatul­lah of Dhaka granted the remand on 13 July, according to prosecution department Sub-Inspector Moktar Hossain.

Mohammad Khayez Ahmad, on behalf of NJ Diamonds, an affiliate of Northern University Bangladesh Trust, filed the case with Banani Police Station on 8 July.

According to the case statement, the two female employees allegedly worked with unidentified accomplices to replace genuine diamond jewellery with replicas and gradually steal and misappropriate the original items between 27 April 2024 and 8 July 2026.

NJ Diamonds authorities alleged that the group had long been involved in diamond smuggling and had links to diamond smuggling operations from India and Dubai.

Investment potential remains

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 export and the domestic market.

However, clear information about the factory’s full-scale operations in recent years remains limited.

Bangladesh still has a small number of cutting and polishing facilities. Industry insiders believe the country could develop a significant export-oriented diamond industry with appropriate policy support.

The global market for polished diamond exports is worth around $10 billion, with India holding a major share.

Bangladesh already has skilled jewellery craftsmen, while the government has eased some of the constraints surrounding gold imports. Traders believe lower duties on rough diamonds, easier access to bond facilities and stronger export incentives could help revive the sector.

New rules target seized precious stones

The National Board of Revenue (NBR) recently issued a new standing order to make the disposal of uncleared and smuggled 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 17 August, includes specific provisions for gold, silver, platinum, diamonds, jewellery and foreign currencies.

Under the new rules, recognised testing organisations must certify such precious items. If authorities cannot obtain a certificate, they must temporarily deposit the items with Bangladesh Bank.

After receiving the goods at a warehouse, authorities must send them under police escort to the nearest Bangladesh Bank or treasury bank on an urgent basis. If the judicial process does not conclude within two months, authorities must deposit the items with Bangladesh Bank.

The new system is expected to improve oversight and transparency in the 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 availability of diamonds in the market despite the absence of legal imports poses a major challenge to business integrity.

He alleged that some unscrupulous traders are involved in the illegal trade and urged the authorities to strengthen monitoring and take action against those responsible.

Expressing concern over the abnormal supply of diamonds and volatility in gold prices, Hossain said there had been no significant legal diamond imports since 2018 despite the continued availability of diamond products in the market.

“This clearly indicates that diamonds are entering the country through illegal channels,” he said.

“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,” Hossain added.

He also warned against selling fake or lab-made diamonds as natural stones. He advised sellers to provide valid certificates with genuine diamonds and urged consumers to verify certification before purchasing.

Hossain called for regular monitoring by authorities, including the Directorate of National Consumers’ Right Protection, to protect consumers.

He said the jewellery industry is currently going through a difficult period, particularly because sharp fluctuations in gold prices have discouraged ordinary consumers from buying jewellery.

He also attributed the downturn to global economic uncertainty, including the recent Middle East crisis, tensions between Iran and the United States and volatility in oil prices.

The key question remains: if legal diamond imports and exports have virtually disappeared, how does an estimated Tk11,000-crore market continue to operate? Industry insiders say the answer lies in a combination of smuggling, tax evasion and the widespread circulation of imitation and lab-made diamonds.