India’s diamond industry has a rich and illustrious history. Renowned for its craftsmanship and expertise, the Indian diamond sector has evolved into a global powerhouse. India has been a major player in the global diamond market, with the gems and jewellery industry being a cornerstone of the country’s economy. However, recent geopolitical and economic disruptions at the global level have presented challenges for this industry.
As mentioned in the Financial Express, according to data from the Gems and Jewellery Export Promotion Council (GJEPC), there is a substantial decline of 23.37% in India’s overall gross diamond exports between April 2023 and October 2023. The export figures dropped from $23.8 billion to $18.24 billion during this period. In the midst of these challenges, industry players are looking to the Lab Grown Diamonds (LGD) market with hope. Let’s explore how LGD can be a ray of hope for the Indian diamond industry.
What’s Happening?
As mentioned in Zee Business, according to credit rating agency CRISIL, the revenue of India’s diamond polishing industry is estimated to decrease by 30-35% to remain at $14-15 billion in the current financial year due to weak demand from the United States, European Union, and China. The Economic Times reports that the gross export of cut and polished diamonds during April-September FY24 witnessed a decline of 28.7%, reaching $8,702.23 million compared to the same period a year ago. Meanwhile, according to GJEPC, there was a 25.84% decline in the gross export of polished Lab Grown Diamonds between April and October 2023.
You might wonder how a decline in the export of polished Lab Grown Diamonds can support the overall diamond industry. Before answering that question, let’s understand Lab Grown Diamonds (LGD).
What are Lab Grown Diamonds?
Lab Grown Diamonds, developed in a laboratory, are synthetic or man-made diamonds. They are created through advanced technological processes that replicate the growing conditions of natural diamonds. These diamonds exhibit physical, chemical, and optical qualities similar to diamonds obtained through traditional mining, providing sustainable and ethical alternatives.
In the face of challenging times for the Indian gems and jewellery market, Lab Grown Diamonds can play a crucial role. Even though the export of Lab Grown Diamonds may have decreased, their demand in domestic markets is rapidly rising.
Rising Demand for Lab Grown Diamonds
According to Financial Express, the growing demand for Lab Grown Diamonds in domestic markets is providing much-needed support to the struggling Indian gems and jewellery industry. Despite a 25% decline in exports, Lab Grown Diamond carats (cut and polished) increased to 20 million between April and July 2023. This is 5.57% higher than the same period in 2022. In contrast, there was a 26 lakh carat decline in mined cut and polished diamonds (CPD).
Approximately 10 lakh roughs are entering India every month, providing sufficient employment opportunities for workers in the industry. This number is expected to increase to 50 lakh roughs per month in the coming years.
Hope for the Diamond Industry
Employment Opportunities: The diamond factories are struggling to operate at full capacity due to low international demand. This has resulted in job losses for workers involved in cutting and polishing natural diamonds. However, some individuals are now finding employment in the Lab Grown Diamond industry, offering an alternative for those affected.
Sustainable and Ethical Practices: Diamonds developed in labs are gaining popularity not only for their economic benefits but also for their environmental and ethical advantages. The production of LGD requires less energy and resources compared to traditional diamond mining. Moreover, LGD mining practices are free from ethical concerns associated with traditional diamond mining, making them an attractive option for socially conscious consumers.
What’s Next?
While the Indian diamond industry faces challenges, as mentioned in the Economic Times, Pooja Sheth Madhavan, MD of Limelight Diamonds, states that global LGD production has already reached 30 million carats. Producers have lowered prices significantly, and there is no indication of a further decline. It is anticipated that demand could reach 160 million carats by 2030. Markets such as India, the Gulf, and China are increasingly turning towards LGD.
The growing demand for LGD in both domestic and international markets not only helps mitigate the impact of export decline but also provides a platform for the development and improvement of the industry.
That’s it for today. We hope you’ve found this article informative. Remember to spread the word among your friends. Until we meet again, stay curious!
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