On June 21 (local time), Prime Minister Narendra Modi gifted First Lady Jill Biden a 7.5-carat lab-grown green diamond with earth-mined diamonds’ chemical and optical attributes. The diamond is placed in a Papier mâché – the box known as kar-e-kalamdani. The laborious paper pulp preparation known as sakthsazi in Kashmir combines the intricate painting process known as naqqashi to create the magnificent papier mâché.
Lab Grown Diamonds, also known as green diamonds, caught the eye of the media on February 1, 2023, when Finance Minister Nirmala Sitharaman reduced basic customs duty on seeds used in their manufacturing. She said, “India is a global leader in cutting and polishing of natural diamonds, contributing about three-fourths of the global turnover by value. With the depletion in deposits of natural diamonds, the industry is moving towards Lab Grown Diamonds (LGDs), and it holds huge promise. To seize this opportunity, I propose to reduce basic customs duty on seeds used in their manufacture.”
Gujarat Government also has a series of initiatives for LGD manufacturers. For example, in November 2022, Gujarat Government waived off charges paid for high-tension electricity lines used by the LGD industry. A press release from November 2022 noted, “A basket of incentives has been offered, including concessions in power cost, interest cost and tax, R&D support to develop indigenous technologies for LGDs, skill development support to encourage skill upgradation for the existing workforce etc. In a bid to reduce electricity tariff, 35% of the charges paid to distribution licences for LT/HT service lines up to Rs. 5 Lakhs can also be availed by industrial units. Another incentive offered is the 100% reimbursement of employer contribution of EPF up to 12% of basic pay or up to Rs. 1800 per month, whichever is lesser, for a period of 10 years.”
India is known for its prominent presence in the diamond industry. Surat, known as the world’s diamond capital, is believed to be the place where nine out of ten diamonds are polished. The $22 billion worldwide diamond market is an opportunity for LGDs. In recent times, these diamonds are gaining popularity because of the technological advancements. The consumer is becoming aware of such diamonds, which has increased the demand. Above all, these diamonds are eco-friendly and fit well into the budget.
As per reports, mining a single carat of diamond releases around 57 KG of carbon into the environment, making it a serious problem. In comparison, only a few grams of carbon are released per carat in the case of LGDs. In 2019, Duchess of Sussex Meghan Markle was seen wearing LGD earrings that were grown in just five days, as reported by BBC.
One of the major issues with these diamonds is that they are often marked as “fake”. In reality, they are 100 percent real diamonds that are not formed in nature over millions of years but grown in a lab using the latest technology. The produced product has the same chemical, thermal, optical and physical characteristics as mined diamonds. In simple terms, they can be compared to the concept of test-tube babies and naturally grown babies. The end result is the same, with different “processes” involved.
The best aspect of these diamonds is that as no mining is required, they do not cause any damage to the environment. There is no cost involved related to mining and distant transportation either. As a result, the customer ends up paying around 50 per cent of the cost of mined diamonds. Interestingly, the cost is expected to decrease as technology becomes more advanced and cheap.
The government’s initiative to push for lab-grown diamonds will also increase demand, bringing competition in the market and helping bring down the price. Antwerp-based World Diamond Centre told the Sunday Guardian that producing one carat of LGD required $4,000 of capital earlier. However, today it can be done between $300 and $500.
There are two methods of creating LGDs. The first method is Chemical Vapour Deposition (CVD), and the second is High-Pressure High Temperature (HPHT). India is currently the largest producer of LGDs produced using the CVD method and covers around 25 percent of the market share. Diamonds produced using the CVD method are Type IIA quality certified by all leading diamond certifying bodies.
For those who are unaware, Type IIA quality diamonds are the rarest of mined diamonds. Only 2 per cent of all the mined diamonds fall under this category. China is the largest producer of LGDs produced using the HPHT method. Such diamonds are inferior in quality and do not have the same hardness as mined or CVD LGDs. Furthermore, HPHTs are known to contain metal impurities.
Though media has been catching up to the LGDs recently, it is interesting to note that LGD exports in Financial Year 2023 until February this year were 45 percent higher compared to last financial year. In FY’23, India exported LGDs worth Rs 12,000 crore, while it was Rs 8,719 crore in FY’22. Reportedly, there are around 8,000 polishing units in India. Out of these, one-fourth have already started polishing LGDs. Around 15 percent of diamond polishing units exclusively deal in LGDs.
As the technology is capital-intensive and time-consuming when it comes to producing high-quality diamonds, there are speculations that the price may rise for LGDs in the future. However, with growing demand and government initiatives in the field, production may steadily increase in the coming years. The LGD jewellery industry is estimated to be $10 billion, expected to grow to $50 billion by 2030.
The blood diamonds
The diamond mining industry is clouded by blood, greed and conflict. Mines worldwide, especially in Africa, see a lot of conflicts. A Time report suggested that Mwanza and Rodriguez are home to 65 percent of the world’s diamonds. Until 2003, it was surrounded by reports of conflicts and forced labour. The diamond industry established an international certification system known as Kimberley Process to reassure customers that the diamonds they bought were conflict-free.
However, the loopholes in the system let the region remain a war zone. Despite Kimberley Process in place, it has been reported that the diamond mines have funded a genocidal war that has killed thousands since 2013 in the Central African Republic (CAR). As per the UN Panel report, around 1,40,000 carats of diamonds worth $24 million were smuggled out of CAR despite being suspended in 2013. While companies like Tiffany have strict regulations to ensure no blood diamonds enter their stores and around 22 countries have signed Kimberley Process, it is not possible to stop blood diamonds from entering the market any time soon.
