According to industry analysts, there were just a handful of lab diamond growers approximately five years ago, but their numbers have increased dramatically in the last 2-3 years owing to a slump in the natural diamond sector, according to a study submitted by Prabhudas Lilladher. According to the report, this has resulted in increased competition between lab diamond and mined diamond industries.
One of the incentives provided by the government is the automatic approval of 100 percent foreign direct investment (FDI) in the industry. Furthermore, according to Budget 2019-20, the GST rate has been decreased from 18% to 5%. The year 2019 was especially notable for lab-grown diamonds.
The worldwide diamond industry has recently experienced headwinds, but lab-grown diamonds appear to have emerged from the shadows of natural diamonds and established a significant foothold in the gems and jewellery business. India alone saw a strong increase in lab-grown diamond exports worth $443 million, up 102% year on year. According to the survey, even at the start of 2020, lab-grown diamond shipments in India were up 60% year on year, while natural diamond exports were down 41% year on year.
Currently, lab-grown diamonds account just a modest percentage of the market; India delivered about $24 billion in polished diamonds obtained naturally last year. GJEPC data reveal that polished lab-grown diamond exports from India increased by approximately 70% to $622.7 million between April and July, while cut and polished mined diamond exports declined by roughly 3% to $8.2 billion over the same period. According to the GJEPC, the country accounts for around 15% of worldwide lab-grown diamond output.
A carbon seed is inserted in a microwave chamber and superheated into a burning plasma ball to produce lab-grown diamonds. The method produces particles that crystallise into diamonds in a matter of weeks. The sole difference between lab-grown diamond and natural diamond is that lab-grown diamond is made in a lab using a machine rather than digging in the soil.
Because this technology-based production directly reduces the capital and labor-intensive aspects of the mined diamond chain, lab-grown diamonds are 30-40% cheaper than mined diamonds while being 100% diamond. CVD and HPHT are the two forms of lab-grown diamonds. India excels and leads in the chemical vapour decomposition (CVD) technique, which is verified as producing the finest diamonds.
According to the paper, the Gemological Institute of America predicts that total annual sales of laboratory diamonds will exceed $100 billion in the not-too-distant future, up from around $20 billion now. This diamond category is increasing at a pace of 15-20% every year. Surat is estimated to polish nine out of every ten diamonds in the world. Although the world is still learning about lab-grown diamonds, Surat has made significant progress in polishing in the previous 2-3 years. Currently, 25-30% of Surat's diamond polishing units service lab-grown diamonds, with 15% of units dealing only in the lab-created product. According to Dinesh Navadia, GJEPC's regional chairman for Gujarat, the percentage of lab-grown diamond polishing in Surat used to be in the single digits till 2019.