After working with mined diamonds for 50 years, Sanket Patel, Director of Greenlab Diamonds, decided to future-proof his business. In 2016, he switched to lab-grown diamonds in the quest to create a greener supply chain in the expensive gem.
The move was not an easy one for the third-generation diamantaire based in Surat, which processes some 90% of the world's diamonds. The naysayers said he was pulling down an established business. “Back then, most manufacturers did not believe in the product or that we could pull it off. Now, almost 80% of the industry is looking at LGDs (lab-grown diamonds) to run their operations. We understood the future well in advance,” he says.
While natural diamonds are formed over billions of years under the earth’s surface with intense heat and pressure, LGDs are made in labs in less than a month through either chemical vapour deposition (CVD) or high pressure, high temperature (HPHT) technologies. LGDs are far more affordable than natural diamonds — sometimes up to 70% cheaper — and have been gaining traction among consumers because of factors such as price.
Colin Shah, MD of Mumbai-based Kama Jewelry, says while smaller goods cost 30-35% of the price of a natural diamond, lab-grown gems over a carat cost approximately 10-15% of the price of natural ones.
Since the pandemic, people have also become more aware of where their diamonds are coming from. Diamond mining causes pollution, and armed conflicts in some countries for supremacy of mining areas have made many buyers wary of buying such “conflict diamonds.” Patel says LGDs mined diamonds are infamous for slave labour, paltry wages, and dangerous working conditions. “So many workers get injured in landslides in mines. A look at the lives of people digging them out is not a pleasant one,” he says.
In fact, greater control over the supply chain is a major reason why lab grown diamonds are evincing a lot of interest in recent times.
Data supports this growing trend. According to an ICRA report, Indian LGD exports have grown six-fold from $225 million in FY2019 to $1,311 million in FY2022, reflecting a CAGR of 70%. It further stated that healthy growth momentum in LGD exports continued in the 9 months of FY 2023 with 44% year-on-year growth. “It is likely to continue in the near-to-medium term, given its affordability, lower carbon footprint and increasing acceptance by consumers in the fashion and jewellery segment,” the report added.
The Gem & Jewellery Export Promotion Council (GJEPC) estimates India contributes about 15% of the global production of lab-grown diamonds.
Vipul Shah, Chairman of the council, says: “It is estimated that 80% of stores in the US sell LGDs and we see the trend growing all over the world, including India. Manufacturers have invested significantly in the research and development of lab-grown diamonds, leading to improved technology and production processes. This has resulted in a higher-quality product and more competitive pricing, making Indian LGDs more attractive to global buyers.”
Read More at https://economictimes.indiatimes.com/small-biz/trade/exports/insights/shining-bright-why-indian-exports-of-lab-grown-diamonds-have-risen-six-fold-in-three-years/articleshow/99253904.cms