Ho Chi Minh City’s jewellery district is facing disruption after Vietnamese authorities uncovered a major diamond smuggling network, prompting widespread concern among buyers and industry insiders. The investigation revealed that over 30,000 diamonds, valued at more than 1.5 trillion dong (approximately S$73 million), were illicitly imported over the past two years. These stones, primarily sourced from India and routed through Hong Kong, were reportedly concealed in luggage, shoes, and clothing to evade detection.
Law enforcement officials also uncovered a scheme involving certification laboratories, where original laser inscriptions from the Gemological Institute of America were removed and replaced with falsified markings. The manipulated certificates overstated the quality of the diamonds, increasing their market value unlawfully.
The scandal has had immediate consequences for Vietnam’s jewellery sector. Several prominent retailers, including Phu Nhuan Jewelry (PNJ), the country’s largest publicly listed jeweller, and Saigon Jewelry Company (SJC), are under scrutiny. Police detained the former head of PNJ’s gem certification subsidiary, although PNJ maintains that no compromised diamonds entered its retail channels and attributes the matter solely to this individual. Meanwhile, SJC faces investigation after authorities arrested related suspects accused of supplying more than 3,400 lower-quality diamonds worth about 500 billion dong to its outlets between 2022 and 2024.
Consumer confidence has plummeted, with many customers rushing to resell their diamonds. Thanh Hang, a Ho Chi Minh City resident, found the store she purchased her diamond ring from closed and faced delays in obtaining refunds. Vietnamese jewellery stores commonly offer buyback programs designed to assure customers of future resale options, but some are struggling to meet demand. PNJ has limited daily repayments to preserve liquidity and mitigate financial strain while planning to engage international auditors to review its diamond inventory.
Industry representatives and government officials have acknowledged the need for tougher regulation. Huynh Trung Khanh, vice-chairman of the Vietnam Gold Traders Association, called for the establishment of an independent gem certification authority to improve market oversight, transparency, and accountability. The government is also conducting a broader inspection of gemstones and precious metals in August, focusing on product origin and labelling.
Diamonds hold cultural significance in Vietnam as both luxury items and stores of wealth, a preference dating back to periods of economic instability and limited investment alternatives. Customs data indicate Vietnam imported over US$122 million worth of diamonds in the first half of 2026, mainly from India and Belgium.
The scandal has amplified concerns about illicit trade and counterfeit gems entering the market, with experts suggesting that other precious stones might also be smuggled. Additionally, the rising presence of synthetic diamonds globally, notably produced in China, complicates authenticity verification, as even experienced professionals can struggle to distinguish them from natural stones visually.
As the industry grapples with the fallout, analysts warn that smaller and less-established jewellers may face significant challenges maintaining consumer trust and financial stability in the current environment. Some consumers have bypassed traditional retailers, attempting to sell diamonds through social media platforms, often at steep discounts, reflecting ongoing uncertainty in the market.