- Most of the world’s diamonds come from the mines of Russia, but they are cut in Mumbai and Surat.
- Now Indian traders also cultivate the gemstone in India in a laboratory to become less dependent on imports.
- This lab-grown diamond industry market in India was 2,200 crore in 2021 and is expected to grow exponentially.
- Currently, India’s lab-grown exports are about $1.3 billion and growing at a rate of 105% yoy.
India has always been a diamond cutting center thanks to a vibrant small-scale industry that powers it. Now it wants to climb the value chain by producing its own diamonds – not by mining, but by growing them in labs.
It also helps that lab-grown diamonds (LGDs) are no different from their prized, mined counterparts. The only difference is the certificate. Mined diamonds will earn you a white one, while lab grown diamonds will have a yellow certificate.
Retailers claim lab diamonds are greener and 55-60% cheaper than mined diamonds.
“If I get a diamond for $4,000 and a lab-grown diamond costs $700-800, young people would spend the rest of the money on travel and other experiences,” said Shardul Vashi, head of marketing at Maitri Diamonds.
India’s annual lab-grown
Shashikanth Dalichand Shah, chair of the Lab Grown Diamond & Jewelery Promotion Council, believes it is only a matter of time before India becomes the largest outsourcing hub for lab grown diamonds and jewelery (LGDJ).
The largest market is abroad
Sales of lab-grown diamonds in India are much higher abroad than in the domestic market, with 60-70% being exported. Foreign grown diamonds are more popular abroad as jewelry is usually more about fashion while in India it is more of an asset.
Thus, in the domestic market, the main customers are the aerospace, research and industrial equipment industries. In 2021, the LGD market in India was about ₹2,200 crore ($250 million). Jewelry, according to retailers, only contribute about 2% of the pie.
However, industry experts believe that LGD jewelry will become more popular in India as well.
Because lab-grown diamonds are more affordable, Shah believes they will adorn more bracelets, necklaces, and rings. Every Indian woman, living in a hut or bungalow, owns at least 1 gram of gold and soon diamonds could be part of that too.
“Only 3-4% of Indians actually buy diamonds and now middle-class people can afford diamonds too,” Mahesh Sonani, MD of LGD manufacturing company Sonani Industries, told https://londonbusinessblog.com/ India.
Aside from the cost difference, the fact that lab-grown diamonds aren’t blood diamonds or harm the earth will also play a role in their sales.
Consumers take the time to switch
Shah said lab-grown diamonds contribute only 3% to the Indian industry due to a lack of awareness in the B2C market. A mined diamond is exclusive, rare and the most expensive gemstone of all, making for an attractive offer for the consumer.
With lab-grown diamonds, albeit equally shiny, some consumers may find it difficult to see their appeal.
But Shah is optimistic that the origin of a diamond will become secondary in the coming years. He said: “When a baby is born, you don’t ask how it came, whether it’s through natural means, IVF, or if it’s a test tube baby. The birth certificate does not state how the baby was born.”
The world’s largest mines like Argyle Mine in
Australia are shut down, and a drop in supply from Russia gives lab diamonds a boost.
Millennials and GenZ are first adopters
Sonani Industries says there is a lot of interest in lab-grown diamonds from millennials, who prefer the “greener and cheaper” versions.
Trivedi of Maitri Diamonds said millennials are also more open to lab diamonds because they want to make a fashion statement without burning a hole in their pocket.
“People used to be suspicious of lab-grown diamonds, but in the last two years there has been a growing awareness about the characteristics of lab-grown diamonds. It is exactly the same, which attracts more consumers and it is not just limited to high-end consumers,” said Harshil Trivedi, senior sales associate of Sahajanand Technologies Ltd (STPL), a homegrown company that supplies diamond machines to the world.
LGDs are created artificially by simulating the conditions that produce natural diamonds in the earth. There are two categories of lab-grown diamonds: chemical vapor deposition (CVD) and high pressure and high temperature (HPHT). Currently, China supplies the raw material for HPHT, while India makes nearly 90% of CVD diamonds, said Kishan Trivedi of Maitri Diamonds of Surat. However, India is also looking at a larger share of the HPHT market, Trivedi added.
There are currently about 2,200-2,800 lab diamond machines in India. This could rise to 5,000 in two years, pushing production levels in India to new heights, said Shah of the LGDJ Council.
As the LGD industry continues to grow at 28%, Shah of LGDJ Council is confident that more consumers will embrace the greener alternative of diamond.
“Sky is the limit for this democratic diamond,” Shah said.