India, one of the world’s leaders in the processing of natural diamonds, has a high chance of becoming the world’s largest producer and exporter of lab-grown diamonds (LGD), the Times of India reports.
The sharp fall of LGD prices over the past year forced some of the world’s leaders in producing synthetic gemstones to rethink their positions. On the contrary, relatively young Indian companies have quickly capitalized on the situation by offering products at very competitive prices.
The average price per carat of LGD has fallen from about $355 in 2022-2023 to about $179 in 2023-2024, prompting many major companies, including the largest US producer of synthetic diamonds WD LGD, to file for bankruptcy last year.
Similarly, international natural diamond giant De Beers suspended production of LGDs for jewelry in May. The latest company to join the closure of stores is Diam Concept, a French lab-grown diamond firm that went into receivership in July.
Industry insiders say lab-grown diamond makers made huge profits when LGD prices were high and supplies were scarce. As profits fall, it becomes difficult to cover costs, whereas in India, production costs are much lower. Local firms have the distinct advantage of lower costs for growing, cutting and polishing, manufacturing jewellery and setting up a global marketing network. “Hence we can manage with lower profits as well,” says Dinesh Navadia, chairman of the Diamond Institute of India.
Thus, in 2022-2023, India’s LGD exports stood at 4.73 million carats, worth $1.68 billion. In 2023-2024, LGD exports were up to 7.81 million carats, but fell to $1.4 billion in value terms. As a result, Indian firms are creating stiff competition in the global synthetic diamond market with an already established cutting and polishing infrastructure.
According to Vipul Shah, Chairman of the Gem & Jewellery Export Promotion Council (GJEPC), “India’s emergence as a global LGD manufacturing hub has been phenomenal.”
“Our country’s diamond expertise, strong infrastructure, skilled workforce, and cost-effective operations have positioned us as a preferred destination for LGD production,” he said.
Meanwhile, China is gradually snapping at India’s heels. There is already intense competition in smaller diamonds, and it could intensify if China moves into producing larger (more than one carat) diamonds, experts say.
Hélène Tarin, Editor-in-Chief of the Asian Bureau, Rough&Polished
