- Most of the world’s diamonds originate from the mines of Russia but they are polished in Mumbai and Surat.
- Now, Indian merchants are also growing the precious stone in India in a lab to become less import-dependent.
- 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 export is around $1.3 billion and is growing at a pace of 105% y-o-y.
It also helps that lab-grown diamonds (LGDs) are no different than their prized, mined counterparts. The only difference is the certificate. Mined diamonds fetch you a white one, while lab-grown diamonds have a yellow certificate.
Retailers claim that lab diamonds are greener and 55-60% cheaper than mined diamonds.
“If I get mined diamond for $4,000 and a lab-grown diamond costs $700-800, young people would spend the remaining money on travel and other experiences,” said Shardul Vashi, head of marketing, Maitri Diamonds.
India’s annual lab-grown
Shashikanth Dalichand Shah, chairperson, Lab Grown Diamond & Jewellery Promotion Council, believes that it’s just a matter of time before India becomes the biggest outsourcing hub for lab-grown diamond and jewellery (LGDJ).
The biggest market is abroad
The sales of India’s lab-grown diamonds are much higher abroad than in the domestic market, with 60-70% exported. Lab-grown diamonds are more popular overseas as jewellery tends to be more about fashion, while in India it’s more of an asset.
Thus, in the domestic market, the major buyers are space, research and industrial equipment industries. In 2021, the LGD market in India was about ₹2,200 crore ($250 million). Jewellery, as per retailers, only contributes about 2% of the pie.
However, industry experts believe LGD jewellery will become more popular in India as well.
As lab-grown diamonds are more affordable, Shah believes that they will adorn more bangles, necklaces and rings. Every Indian woman, living in a hut or a bungalow, owns at least 1 gram of gold and diamonds could soon be a part too.
“Only 3-4% of Indians actually buy diamonds and now, middle-class people can also afford diamonds,” Mahesh Sonani, MD of LGD manufacturing company Sonani Industries, told Business Insider India.
Apart from the cost difference, the fact that lab-grown diamonds are not blood diamonds or harm the earth will also play a role in their sales.
Consumers take time to switch
Shah said that lab-grown diamonds contribute only 3% to India’s industry because of a lack of awareness in the B2C market.
A mined diamond is exclusive, rare and the most expensive gem of them all, which makes for an attractive offer for consumers.
With lab-grown diamonds, albeit equally shiny, some consumers might have a tough time seeing its allure.
But Shah is optimistic that a diamond’s origin will become secondary in years to come. He said, “When a baby is born, you don't ask how it arrived, whether it is through natural means, IVF, or is it a test tube baby. The birth certificate doesn’t mention how the baby was delivered.”
World’s major mines such as Argyle Mine in Australia are shutting down and with a supply cut from Russia, lab diamonds will get a push.
Millennials and GenZ are first adopters
Sonani Industries says that there is a lot of interest for lab-grown diamonds from millennials as they prefer the ‘greener and cheaper’ versions.
Trivedi of Maitri Diamonds said that millennials are also more open to accepting lab diamonds because they want to make a fashion statement without burning a hole in their pockets.
“Earlier, people were suspicious of lab-grown diamonds but in the last two years, there’s been a growing awareness about the characteristics of lab diamonds. It’s exactly the same, which is attracting more consumers and it’s not just limited to high-end consumers,” said Harshil Trivedi, senior sales associate of Sahajanand Technologies Ltd (STPL), a home-grown company that provides diamond machines to the world.
LGDs are made artificially by simulating the conditions that produce natural diamonds in the earth. There are two categories of lab-grown diamonds – chemical vapour deposition (CVD) and high pressure and high temperature (HPHT). Currently China supplies the roughs for HPHT while India makes almost 90% of CVD diamonds, said Kishan Trivedi of Surat-based Maitri Diamonds. However, India is eyeing a larger share of the HPHT market as well, Trivedi added.
There are about 2,200-2,800 lab diamond machines in India currently. This could go up to 5,000 in two years, taking India’s production level to new heights, said LGDJ Council’s Shah.
As the LGD industry continues to grow at the rate of 28%, Shah of LGDJ Council is confident that more consumers will embrace the greener alternative of diamonds.
“Sky’s the limit for this democratic diamond,” Shah said.