Jewellery made from lab-grown diamonds is likely to capture over 2 per cent of India’s $14 billion worth of overall gems and jewellery exports to the US, the world’s largest consumer of the precious stones and metals, contributing nearly half of the world production. Exports to US, the largest market for Indian exporters is estimated at $280 million this year.
Commercialised officially with a separate harmonised system (HS) code in India last year, lab-grown diamond is gradually making inroads in the Indian jewellery manufacturing industry. With its price quoted at a fourth of the natural diamond, the lab-grown precious stone is also lustrous and shining.
“In the United States, consumers are aggressively opting to buy lab-grown diamond jewellery to save money and divert their investible surplus funds to other asset classes. Indian exporters have recorded an increase in orders from the United States for the ensuing festive season including Christmas, New Year and Women’s Day. We estimate lab-grown diamond jewellery will capture 2 per cent of the US market share from overall exports of gems and jewellery to the Unites States,” said Shashikant Dalichand Shah, Chairman of The Lab Grown Diamond and Jewellery Promotion Council, on the sidelines of the International Lab Grown Diamond and Jeweller Expo 2019 here on Friday.
Apart from the US, India exports its lab-grown diamonds to France, Italy and Australia apart from other European and Asian countries, in small quantities. India does not export lab-grown diamond jewellery to China, but imports a lot of lab-grown rough diamonds of smaller size from there.
Indian jewellery makers, however, import large lab-grown rough diamonds from the US.
“Like natural diamond, India has proved its leadership role in the cutting and polishing of lab-grown rough diamonds which are processed in the same way as natural diamonds. Hence, a large quantity of lab-grown diamonds produced worldwide are processed in India for branding and retailing,” said Arvind Patel, Managing Director, SLTL Group, a Gandhinagar (Gujarat)-based technology supplier for lab grown diamond.
In a recent interview with Business Standard, De Beers' Group Chief Financial Officer Nimesh Patel had said, “Natural diamonds do not compete with lab-grown diamonds within the De Beers Group. But lab-grown diamonds are just another product with a huge potential.”
Looking at their potential, the world’s largest natural diamond miner De Beers entered into the production of lab-grown diamonds a few years ago.
Meanwhile, industry participants have urged the government to cut taxes on imported plants and machinery used in the processing of lab-grown diamonds. Currently, imports of machines for the processing of lab-grown diamonds attract 7.5 per cent import duty and 18 per cent of the goods and services tax (GST).
All leading global jewellery certifying agencies, including International Gemmological Institute (IGI), Gemmological Institute of America (GIA) and others issue certificates of authenticity like they do for natural diamonds.
“The supply of lab-grown diamonds can be increased at any point in time and it has good future in diamond jewellery industry in the world,” said Somchai Phomchindark, President of the Gems, Jewelry & Precious Metal Confederation, the premier gems and jewellery trade body in Thailand.
Many jewellers offer a buyback of 90 per cent on lab grown diamond jewellery.