Lab Grown Diamonds will continue to grow by over 50% annually
India’s Lab Grown Diamond industry has witnessed exponential growth over the past few years owing to factors like convenience of production, access to raw materials and affordable price, etc. The sector holds enormous potential in terms of both production and exports paralleled with India’s green initiatives. Smit Patel, Director of Greenlab Diamonds, shares his insights on the business prospects and export opportunities within the industry.
Image Credit: Greenlab diamonds
Lab-grown diamonds (LGDs) are witnessing a rising trend in India’s jewellery industry. These diamonds, also known as synthetic or cultured diamonds, are created in laboratories using advanced technological processes that replicate natural diamond formation. They possess the same physical, chemical, and optical properties as natural diamonds but are produced in a controlled environment.
In recent years, the popularity of lab-grown diamonds has grown significantly, driven by factors such as ethical and environmental concerns, affordability, and versatility. Lab-grown diamonds are considered a sustainable and eco-friendly alternative to mined diamonds as they eliminate the need for extensive mining operations, reduce carbon footprint, and minimize the environmental impact.
Do LGDs Support Make In India?
Due to similar quality, sustainable and quick methods of production Greenlabs LLC shifted from naturally mined diamonds to cultivated diamonds over the past few years. In fact, my grandfather, despite his exemplary experience, could not differentiate between the mined and lab-grown diamonds, when he was introduced to them. This gave us a very strong indication of the kind of potential that the product has very early.
India’s LGD industry is growing significantly. Although we are currently importing carbon seeds, we are on the verge of having our own seeds made in India, since the technology is not far away. As for the machinery, we are importing only a few parts and most of them are manufactured as well as assembled in India. Once the PLI scheme for semiconductors is implemented, the machines will largely be manufactured in India. This means that in the future we won’t have any import dependence and will have high export potential for this industry, making it truly “Atmanirbhar”.
India is not dependent on any other country for the supply of raw materials, unlike countries like Russia for example. If there is a shortage of raw materials, the labour will not get the rock to polish, leading to job losses and pay cuts. In India, we have a consistent supply of our own raw materials.
Leading with Sustainability
Greenlab Diamonds has made comparative assessments on the amount of water and energy used in creating Lab Grown Diamonds. Many companies are now shifting to environment-friendly solutions like having green mills and solar panels to support the government’s green initiatives. Most companies are undergoing several audits and evaluations as well as providing related certifications.
The key material used to create LGD is energy (over 80%), and that energy is being substituted by solar panels and minerals. Greenlab Diamonds has installed a 25-megawatt solar plant and is working on an additional 10 MW hybrid installation with windmills by the end of May 2023, turning the company carbon neutral by the end of 2023.
The process of growing a diamond is entirely technical, as it solely involves the application of heat and gases inside the reactor. Bonding of atoms inside the chamber is a completely natural process with no consistent feeding. As the temperature and pressure are raised to extreme levels, a plasma is created in the chamber, and this reaction initiates diamond growth. The diamond slowly grows, atom by atom, as carbon atoms are drawn to the small diamond seed by the plasma.
During this process, the carbon atoms bond to the diamond seed, forming a larger diamond crystal. The diamond crystal continues to grow until it reaches its desired size. In simple words, the LGDs are cultivated just the way diamonds are formed below the earth’s crust. But here they are developed in a controlled environment above the earth’s surface.
The Potential of LGDs in India
Lab Grown Diamonds offer better potential as they are the same as naturally mined diamonds. The process is similar to cutting and polishing. If there is consistent supply of raw materials, prices will be much lower and they will obviously be much more popular than naturally mined diamonds.
In 2018, over 33% of retailers in America used to keep LGD which increased to 77.8% by 2020 – a period of just two years. Similarly, in India, once awareness starts spreading like wildfire, a lot more consumers are going to be interested in the product.
For industrial purposes, mined diamonds have traditionally been used for drill bits, but they are being replaced with lab-grown diamonds (LGDs) due to their similar material properties. LGDs are heavily used in the optical segment. Lab-grown diamonds possess the capability to operate at more rapid speeds and use less power than silicon-based chips, perfect for extreme and harsh conditions. This makes them ideal for use in dental tools, optical devices, medical instruments, optical coatings and lenses, precision grinding tools, cutting tools, and wear-resistant parts in machinery and aerospace components. Moreover, the potential of diamond microprocessors is exponentially high, which can soon enter India.
Industry Challenges, Exports, and Opportunities
The Lab Grown Industry includes a lot of verticals, so there are different barriers for different segments. Since Greenlab Diamonds was set up over the years, the workers had experience in cutting and polishing the diamonds, but the real challenge is to find a growth path and consistency in both research and development.
Purchasing a reactor and putting it in a small room will not help start a Lab-Grown Diamond business. And though it is the biggest contributor to the Atmanirbhar Bharat initiative, we cannot consider it in a start-up category. There are various things to be kept in mind. For example, we cannot have fluctuation of energy even for a microsecond, so maintaining the technical environment is a real challenge. For a new business, cutting, polishing, and setting up a factory could be an even bigger challenge. Maintaining quality control is essential for producing lab-grown diamonds with consistent results. Careful monitoring of the production process is key to achieving this.
Greenlabs has been recording a YoY growth of 400% since the company identified potential and demand in this sector. With over 1,200 reactors, the company aims to burgeon in the future considering higher demand. Currently, only America has opened up to the LGDs but with increasing awareness in other countries, the company aims to target global markets.
There are a lot of innovative and creative opportunities in this segment as designers can play and make unique and customized designs for customers, inclusive of their own risks. Over 90% of India’s diamonds are being exported, since a lot of jewellery is being made outside India, especially solitaires. Companies like Bombay Diamond Bourse export 90% of their products, as their customers have programs that require particular kind of pieces every month. Similar to traditional methods, the stock list is shared with a lot of jewellers around the world and whenever they have demand, the product is shipped to them, which makes it a continuous kind of business.
India is expected to continue witnessing 50% or more YoY growth even after price correction. Government and industry are working collectively on seminars and exhibitions across the world to promote awareness and exports. The withdrawal of basic customs duty on carbon seeds as announced in Budget 2023 and allocation of Rs 242.96 crores to IIT Madras for establishing an India Centre over the next five years are huge leaps towards expanding the popularity of Lab Grown Diamonds in India.
Smit Patel is the Director of Greenlab Diamonds LLP – the largest cultivator of Lab-Grown diamonds in the world. He is also a panel member of the Lab Grown Diamond Sector of the prestigious Gem & Jewellery Export Promotion Council (GJEPC- A ministry of commerce and industry undertaking). Mr. Smit is a third-generation diamantaire from a family with a proud diamond manufacturing and exporting heritage for more than 50 years. Driven by the need to foster an ethical service, Mr. Smit has championed the use of cutting-edge technology to spearhead the cultivation, growth, and marketing of exceptional-quality Lab-Grown Diamonds in a completely eco-friendly organizational set-up. Greenlab diamonds have a manufacturing unit in Surat and Sales office in Mumbai, the US, Australia, Hongkong, etc.
After graduating from Regents University in Global Business Management, he read up on the Graduate Diamond Program from GIA. He is passionate about seeing the company’s presence in the global market and driving key strategic innovations to get diamonds for everyone in sustainable luxury. Mr. Patel overseas Greenlab’s R&D, Sales, Marketing, PR, and Jewellery divisions, organizational management, and value system.