Exports of polished lab-grown diamonds for the period Dec 2023 stood at US$ 83.51 million and showed a decline of 18.46% over the comparative figure of US$ 102.41 million in December of the previous year. However, the exports were positive in November this year.
Lab-grown diamond manufacturers say that the export figures are down because of the price correction even though the export volume has increased. Export of polished LGDs for the period April -December FY24 stood at US$ 1024.6 million showing a decline of 22.97% over the comparative figure of US$ 1330.18 million in FY23.
Pooja Sheth Madhavan, managing director of Limelight Diamonds said “Prices have fallen by 40-45% on average. The price fall was a curated strategy of the leading growers to reduce super abnormal profits as this was attracting new entrants to establish even 15-20 machines and the quality of production was also adversely affected.”
“Therefore, the growers allowed the price fall and reduced their abnormal profits such that the capex investment breakeven period increased to approximately seven years from 18 months earlier. This was to create an entry barrier for new players, establish a proper value chain, and also control the quality of production. It was a one-of-a-kind phenomenon and the prices have now stabilised. This price stability is seen in the last quarter,” she added.
India produces 3 million lab-grown diamonds annually with Mumbai and Surat being the largest hubs and it has captured 10 percent of the domestic diamond market of $6 billion
However, the natural diamond players said that LGDs have now become a part of fashion jewellery in the US. “The demand for natural diamonds, which had fallen in the US, is showing an upward swing. Holiday sales of natural diamonds in the US had been quite good,” said Dinesh Lakhani, global director of Kiran Gems, global director of Kiran, the largest natural diamond manufacturer in the country.
Like natural diamonds, LGDs are made of tightly bonded carbon atoms. They respond to light in the same way and are just as hard as natural diamonds and are cut and polished like natural diamonds. The main differences between laboratory-grown and natural diamonds lie in their origin. While natural diamonds are mined, LGDs are produced in a controlled environment either through a high-pressure high-temperature (HPHT) process or through a chemical vapour deposition (CVD) process. CVD has become more popular for producing jewellery-grade LGDs.