When Prime Minister Narendra Modi visited the US on International Yoga Day (June 21, 2023), he gifted Jill Biden a 7.5-carat lab-grown diamond made by Surat-based Green Lab Diamond. While a diamond of this size costs about Rs 40.5 lakh, a lab-made version of the same quality and size costs around Rs 15 lakh. Further, the production of this diamond led to 0.028 grams of carbon dioxide (CO2) being emitted per carat, 100,000 times less than the production of the average mined diamond.
Lab-grown diamonds (LGDs), also known as lab-created or synthetic diamonds, are diamonds that are grown in a laboratory using technological processes. The process of growing diamonds in a lab begins with a small diamond seed, which is placed in a chamber where conditions replicate the natural environment in which diamonds are formed deep within the Earth's crust. Through either the High Pressure-High Temperature (HPHT) method or the Chemical Vapor Deposition (CVD) method, carbon atoms are gradually added to the seed, layer by layer, over a period of several weeks or months. This results in the growth of a diamond crystal that is visually and chemically identical to a naturally occurring diamond.
Jewellery made with lab-grown or synthetic diamonds
For jewellery-makers, using LGDs is generally like working with natural diamonds. “The stones can be cut, polished, and set in various metal settings just like natural diamonds. The main difference lies in the sourcing, availability, pricing, and potentially the market perception of LGDs compared to their natural counterparts. LGDs offer a more consistent and reliable supply compared to natural diamonds, which are subject to the limitations of mining operations. This means that jewellers have easier access to diamonds of specific sizes, shapes, and qualities when using LGDs. Both LGDs and natural diamonds undergo grading based on the 4Cs (carat weight, colour, clarity, and cut). However, some grading institutions may use specific terminology or certificates to differentiate between the two types of diamonds,” says Dipu Mehta, managing director, ORRA Fine Jewellery.
Market musings
India has made significant strides in the lab-grown diamond sector. With advancements in technology, government support, and a growing emphasis on sustainability, India is emerging as a key player in this field.
Lisa Mukedkar, founder & CEO, Aukera, says, “India's well-established diamond industry, coupled with its expertise in diamond cutting and polishing, gives it a competitive advantage in the lab-grown diamond market. The country's strong manufacturing infrastructure and skilled workforce contribute to its ability to produce high-quality lab-grown diamonds.
The reduced environmental impact and ethical sourcing associated with lab-grown diamonds further add to their appeal. While the consumer market for lab-grown diamonds in India is still in its early stages, there is immense potential for growth. As consumers, including those with a progressive mindset, increasingly prioritize sustainability and ethical choices, the demand for lab-grown diamonds is expected to rise.”
Government push
Finance Minister Nirmala Sitharaman announced in her Budget 2023 speech that the government would subsidize research and development in the LGD industry by providing a grant to one of the Indian Institutes of Technology for five years. “Lab-grown diamonds is a technology and innovation sector with high-employment potential. Customs duty on the seeds used in lab-grown diamond manufacturing will be reduced. These are environmentally friendly diamonds which have optically and chemically the same properties as natural diamonds,” she said.
Also read: India’s bet on lab-grown diamonds: What will it take to lead the world?
Demand drivers
Quality-conscious Indian consumers seeking the best value proposition are beginning to be interested in what lab-grown diamonds can deliver on both fronts.
“Lab-grown diamonds typically cost around 50 percent less than their natural counterparts, depending on the size and quality of the stone. This price difference allows consumers to access larger and higher-quality diamonds within their budget. Furthermore, when lab-grown diamonds and mined diamonds are both set in 18K gold, the cost of lab-grown diamonds is approximately 60 percent less than that of mined diamonds. This value advantage opens opportunities for individuals to choose larger or more intricate designs without compromising on quality or breaking the bank,” says Mukedkar.
The last 12 months have seen growth in lab-grown diamond production in India - the country produces 15 percent of all LGDs in the world, according to India’s Ministry of Commerce and Industry. The same report also states that “India’s exports of polished lab-grown diamonds were USD 274 million, USD 473 million, USD 637 million and USD 1293 million during 2018-19, 2019-20, 2020-21 and 2020-21, respectively. Annual growth during the same periods were 72 percent, 35 percent and 103 percent.
Also read: Indian lab-grown diamonds set for a bigger sparkle after import duty removal, govt push
Tech talk
Driven by technology, lab-grown diamonds do not incur the environmental and social damage that is usually associated with mining diamonds. The CVD technology offers consumers the purest type of diamond certified as Type IIA by diamond certifying bodies. Finding Type IIA quality diamonds among mined diamonds is rare, with only 2 percent of diamonds mined ever being this purest type of diamonds. India particularly specializes and leads in the CVD technology that is certified as Type IIA. HPHT diamonds, on the other hand, are developed in China and contain metal impurities.
Challenges
Consumer mindset around LGDs being fake / artificial needs to change. Moreover, consumer also have concerns in terms of the resale opportunities for synthetic diamonds. Manufacturers and brands are trying to address this by "offering buyback and exchange opportunities" says Karamjyot Chawla, co-founder of House Of KaSa. Additionally, certification by independent third-party diamond grading institutions like IGI & SGL is sought to give buyers some assurance. These institutions are known for grading mined diamonds, and clearly mark lab-grown diamonds disclosures, adds Chawla.
LGDs are having their moment now, time will tell how they sustain and grow to make the jewellery space ‘rock on’.
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