India’s lab-grown diamond (LGD) industry’s coming out parade actually happened not in India, but across the seven seas. When PM Modi gifted US First Lady Jill Biden a 7.5 carat diamond made in Surat, Gujarat, back in the summer while on his first state visit to the global superpower, it had a ripple effect in the fortunes of the LGD industry back home, mainly in Gujarat.
While LGDs had found a steadily growing market among youngsters and the socially and sustainability conscious, many believe the Modi move helped the crossover into mainstream that much more faster, as evinced by the spurt in LGD business this Diwali festive season.
“There was a significant spurt in the sale of grown diamond (another terminology used for lab-grown diamonds) jewellery sale this festive season,” said Lisa Mukhedkar, founder and CEO of Aukera Jewellery, which reported a spike of 20 per cent month-on-month.
And estimates suggest the growth of LGD, which is presently minuscule compared to that of natural diamonds, will grow at an impressive CAGR of 14.8 per cent in the next decade in the country, hitting a market size of 1.1 billion dollars, from the present valuation of just under 300 million dollars. Globally, the LGD market presently clocks in at 12 billion dollars.
“(LGDs) are 100% carbon, mirroring the elemental composition of mined diamonds,” vouched Mukhedkar. Where they differ is that they are not mined from the bowels of the earth, but by replicating the atmospheric conditions, temperature and pressure akin to the earth’s core—tiny diamond seeds are placed within a plasma reactor (a vacuum chamber) where temperatures soar to 6,000 degrees, leading to carbon atoms to rain down on the seed, layer by layer, mimicking the process that occurs under the earth’s surface. So, what takes millions of years to produce naturally, science expedites to a mere few weeks.
What has made the tide turn in favour of LGDs have been a few unrelated incidents. In 2018, the US Federal Trade Commission ruled that grown diamonds were as legitimate as natural diamonds. This was followed by certification by other bodies like IGI, GIA and others. Diamond industry behemoths like de Beers, Swarovski, Cartier and LVMH also started using LGDs in their collections, further accelerating the category’s growth.
Another factor has been the significant enhancement in the quality of LGDs, which now offer the best of cut, colour and clarity, and larger sizes—all at a significant cost advantage. For example, the 7.5 carat LGD that Modi gifted Jill Biden would cost around Rs 15 lakh, while it would have spiralled upwards of Rs 40 lakh if it was a natural diamond.
With natural diamonds on the decline for the last few years—production has come down since the mid-2010s while the Ukraine war has brought down the supply line from Russia down to a trickle—India’s Surat-centred diamond industry is slowly training its eyes on LGDs. While it controlled 90 per cent of the cutting and polishing of natural diamonds, India now has a decent one-fourth of the total LGD business, exporting more than what is sold within the country.
However, from the looks of it, that may change fast. IIT Madras was sanctioned Rs 242 crore to research on indigenous production of LGDs in this year’s budget. “Lab-grown diamonds is a technology and innovation sector with high-employment potential. Customs duty on the seeds used in lab-grown diamond manufacturing will be reduced. These are environmentally-friendly diamonds which have optically and chemically the same properties as natural diamonds,” Finance Minister Nirmala Sitharaman had said in her budget speech.