HANOI: Vietnamese police revealed how they believe a transnational criminal network allegedly led by an Indian national hid diamonds in luggage, shoes and clothing to smuggle them through the country’s airports, as a second gemstone case heads to trial later this month.
Investigators have detained 31 people in connection with the suspected smuggling ring, which Thanh Hoa police said was orchestrated by an Indian national based in Hong Kong. Authorities said they are expanding the investigation after determining the group smuggled more than 30,000 diamonds worth over 1.5 trillion dong ($57.1 million) into Vietnam.
The diamonds were typically sold at about one-third below prevailing market prices in Vietnam, police said. Transactions were arranged through encrypted messaging apps, with payments settled using a code based on the serial number of a US dollar banknote.
The case has shaken the nation’s largest listed jeweler, Phu Nhuan Jewelry JSC, whose shares have fallen more than 35% after the former head of its gem certification subsidiary was detained in connection with the investigation. PNJ, as the company is known, has said the allegations relate to the former director of PNJ-Lab, not the company, and none of the tainted diamonds entered its retail network.
The trial of a second suspected smuggling ring involving another Indian national, set to begin in a Ho Chi Minh City court later this month, points to a broader challenge for Vietnamese authorities.
Officials from India’s embassy in Vietnam were not immediately available for comment. Vietnamese state media has not indicated whether the defendant denies the charges or has entered a plea.
Shaileshkumar Hareshbhai Prajapati is accused of bringing nearly 1,500 diamonds into the commercial hub over five trips without declaring them to customs, according to state media. Prajapati was detained upon landing at Tan Son Nhat International Airport in October 2024 with 715 concealed diamonds worth 6.8 billion dong, the report said.
The investigations increase pressure on regulators and the jewelry industry to tighten oversight of Vietnam’s diamond market, including stronger checks on imports and gemstone provenance.
"Vietnam’s diamond market is likely to face some near-term headwinds as consumer confidence becomes more cautious,” said Nguyen Thi Sony Tra Mi, senior analyst at Maybank Investment Bank. "Consumers may place greater emphasis on product authenticity, certification, provenance and the credibility of retailers when making high-value purchases,” she said.
Vietnam imported more than $121 million worth of diamonds during the first half of 2026, with India remaining its dominant supplier, according to data from Vietnam customs.- Bloomberg
