The Gujarat government's decision to abolish the electricity tariff on the manufacture of lab-grown diamonds is expected to boost the lab-grown diamond sector in and around Surat. Currently, electricity duty is 10% for low tension (LT) connections and 15% for high tension (HT) connections for diamond units.
Following recommendations from the Gems and Jewellery Export Promotion Council, the state government made the decision only one day before the model code of conduct in the election-bound state entered effect (GJEPC). According to Dinesh Navadia, a former chairman of the GJEPC for the Gujarat area, "The primary expense of the production process for lab-grown diamonds is energy, which represents over 70% of the spending. The move to eliminate the power tax will increase the competitiveness of lab-grown diamond producers located in Surat on the global market, particularly versus their Chinese competitors.
Navadia is a part of the Indian Diamond Institute (IDIgoverning )'s board, which is supported by the Union Ministry of Commerce & Industry. In Surat, the number of lab-grown diamond devices has surged dramatically over the past two years, going from a meagre 20 to 25 to over 1,000. Due to the rising demand for exports, larger conventional diamond cutting and polishing facilities have begun producing lab-grown diamonds.
According to GJEPC data, the preliminary gross exports of polished lab-grown diamonds for the first half of the current fiscal year (April to September 2022) increased by more than 60% to close to Rs 7,400 crore ($943.63 million) from Rs 4,550 crore ($587 million) during the same period of the previous financial year 2021–2022. Chemically and structurally comparable to naturally occurring diamonds, lab-grown diamonds may be created in a matter of weeks as opposed to billions of years. More importantly, synthetic diamonds are much less expensive than natural ones.
With a market share of over 56%, China is the world's largest manufacturer of lab-grown diamonds. Singapore, the US, and India each have a 10%, 13%, and 15% market share, respectively. Russia and the United Kingdom each have a small number of lab-grown diamond manufacturing facilities, although their combined share of the worldwide lab-grown diamond market is less than 2%.
"In Surat alone, nine out of ten raw natural diamonds are being polished. Nearly 95% of them are provided on the international market after being cut and polished. More than 1,50,000 people now have work because to the lab-grown diamond industry, according to Nanubhai Vekaria, head of the Surat Diamond Association.