The world’s largest diamond trading centre, Bharat Diamond Bourse (BDB), is considering allowing lab-grown diamonds to be traded on ots platform in three months.
Since its existence following the shifting of diamond trade from Opera House, south Mumbai in 2010, BDB has restricted import, export, sale and purchase of any type of lab-grown diamonds within its premises. In fact, even imported lab-grown stones cleared by the customs office that exists within the BDB premises, can only be delivered outside the precincts of the bourse.
However, looking at the increasing demand from its members and the trade fraternity, a panel called the Natural Diamond Monitoring Committee (NDMC), was formed to frame trading guidelines of lab-grown diamond. It will submit its report shortly. As of now, the market share of lab-grown diamonds is estimated at 2-3 per cent and some companies, such as De Beers, are planning to increase its production.
“All leading bourses across the world are offering trade in specific commodities. BDB also specialises in diamonds. Currently, lab-grown diamonds are imported for delivery only outside the premises of BDB. But now, the NDMC is framing guidelines that will be reviewed by the BDB board to allow trading in such stones. We hope the process will be completed in three months,” said Anoop Mehta, President, BDB on the sidelines of the Bharat Diamond Week, a three-day exhibition cum sale of polished diamond currently underway in the bourse.
Spread across two million square feet, the BDB houses about 2,500 small and large diamond traders in addition to the customs house, banks and other service providers in the gems and jewellery trade. BDB started trading operations in 2010, after major players from Opera House in south Mumbai shifted their offices to the suburbs.
Launched in India about two-three years ago, lab-grown diamond have seen a spike in demand from customers as they are priced 90 per cent lower than natural diamonds. Most customers also buy lab-grown diamond because over 90 per cent of the deals come with a buyback offer from jewellery retailers.
“Trading of natural and lab-grown diamonds under one roof raises concerns of cheating. In order to avoid any such practice, we have not allowed trade of lab-grown diamonds as of today. But the guidelines currently being framed would put onus of any malpractices in diamond trade on the owner of the stone. On allowing trade, the lab-grown diamond would be fully traceable. The power to penalise wrongdoers will vest with BDB,” said Mehul Shah, Managing Director, Star Brillian and Vice President, BDB.
BDB will have to ensure lab-grown and natural diamonds don't mix and a proper process with firewalls that clearly segregates the two varieties is established. The Committee report is expected to address these issues.
Commercialised officially with a separate harmonised system (HS) code in India last year, lab-grown diamonds are gradually making inroads in the Indian jewellery-making industry. Its lustrous cut and polish, which are similar to those of the natural diamond, make it difficult for a common man to tell the two apart. Meanwhile, with rising demand from the US, leading diamantaires such as De Beers have started manufacturing and trading lab-grown diamonds with definite segregation and classification.