Battle Between Natural and Lab-Grown Diamond Developing in India

Finance and Trade
17/03/2016 08:13

A major article in India's Economic Times describes the developing battle lines between natural, mined diamonds and their lab-grown counterparts. The Bharat Diamond Bourse (BDB) in Mumbai, home to around 2,500 diamond companies and one of the world's largest exchanges, decided last September to act against traders and manufacturers who dealt in lab-grown diamonds. The outlawed trading in lab-grown stones due to increasing instances of such diamonds being added into parcels of natural mined goods. "This was BDB's first formal attack on diamond merchants who trade in lab-grown diamonds (also known as synthetic, cultured, home-made, man-made or man-made diamonds)," writes Shailesh Menon.

"BDB has sided with natural diamond manufacturers, the purists for whom a diamond can be classified as such only if spent millions of years inside the earth, usually in riverbeds, and are then mined. Lab-grown diamonds are nothing short of sacrilege for them because, according to them, they have no pedigree. Pedigree or not, lab-grown diamonds turn the narrative of natural diamonds on its head. They gnaw at the carefully created notion that diamonds are rare and valuable, and synonymous with esteem and luxury." Menon then details the speed at which such stones can be grown and that they cost 30-40% less than mined diamonds.

"We're not worried," says Praveen Shankar Pandya, chairman of the Gem & Jewellery Export Promotion Council (GJEPC). "Our problem with them is only when they sell home-made diamonds as real diamonds... our problem is when they mix synthetics with natural diamonds and cheat people. As long as lab-grown diamonds maintain a separate footprint, we're fine with their existence," affirms Pandya. However, he admits that if left unchecked, lab-made diamonds could threaten the mined diamond industry. "We export 95% of our diamonds; if buyers get lab-grown diamonds in their ordered 'natural pack,' our credibility would go down the drain. We cannot let that happen."

A report commissioned by the National Diamond Monitoring Committee (NDMC) to check the scale of lab-grown diamonds in the country estimated annual production of gem-quality CVD and HPHT synthetic diamonds at 350,000 carats which could rise to 1.5 million carats in three-five years. The report also cites a rise in exports of synthetic stones from India to $79 million in 2014-15 from $25 million in 2011-12. Similarly, imports of rough synthetic diamonds (for polishing) surged to $63 million in 2014-15 from $12 million five years ago. Although these numbers pale in comparison with the export value of mined polished diamonds, Sanjay Kothari, a spokesperson for NMDC, explained: "We're not worried about large-sized lab-grown diamonds, as these can be identified and sorted out easily. The problem lies in small HPHT diamonds (used in jewelry sets) coming from China in rough form. They are difficult to detect." The report cites industry sources as saying that several traders in Surat are engaged in polishing HPHT diamonds sourced from China.