Lab-grown diamonds yet to dazzle the Indian buyer

Would you buy a lab-grown diamond that is priced at just a fraction of the value of a natural diamond? It is visually alike, chemically similar and produced more sustainably than a mined diamond. Only, it is not as rare.

Over the years, the ecological and economical allure of lab-grown diamonds (LGDs) has attracted dazzling investments from leading jewellery brands across the world. LVMH (Moet Hennessy Louis Vuitton), the parent company of luxury brands Bulgari, Tiffany & Co and Hublot, recently joined other investors in pumping US$ 90M in an Israeli LGD producer — Lusix, that uses only solar energy in its diamond labs.

Interestingly, De Beers group, the global leading player in mined diamonds, was one of the first major brands to launch an entire jewellery line of LGDs called Lightbox in 2018 with an investment of US$ 100M. Furthermore, De Beers has set up its very own diamond synthesis lab in Portland, which can generate 2,00,000 stones a year. One carat of LGD at Lightbox is priced at US$ 800 — nearly 60-80% less than a natural-mined diamond of the same weight!

The ‘greener’ choice?

LGDs are cheaper and greener than natural diamonds. A report by the Diamond Producers Association and S&P Global states that the greenhouse gas footprint per one carat of polished natural diamond is 160kg. An LGD, grown and polished, has a carbon footprint of only 8.17 kg CO2e per carat, according to Pandora, a leading global jewellery brand that recently announced it no longer uses mined diamonds.

Synthetic diamonds like cubic zirconia, moissanite or crystals have been around for decades. “What sets LGDs apart from other types of synthetic diamonds is that they are grown by simulating the conditions of a natural diamond’s growth. Carbon, varied levels of pressure, and temperatures are applied on a diamond seed or diamond substrate to grow it into a desired type of diamond that is chemically, physically and optically similar to a natural diamond”, explains Shashikant Dalichand Shah, chairperson, Lab-Grown Diamond and Jewellery Promotion Council (LGDJPC).

Mined diamonds form naturally below the surface of the earth, over several years, whereas LGDs can be created in a lab over a period of only a few weeks through two processes: High Pressure-High Temperature (HPHT) or Chemical Vapor Deposition (CVD). Shashikant explains, “LGDs and natural diamonds consist of pure carbon in the same crystalline form. An expert can distinguish between the two with the aid of a high-tech machine, but not with the naked eye.”

Natural vs synthetic debate

Earlier this year, Titan company (Tanishq & Caratlane.com) made an equity investment of US $20 million in Clean Origin, an American retailer of LGDs and LGD jewellery, through its wholly-owned subsidiary TCL North America, Inc. ‘Are lab-grown diamonds real? The answer is 100% yes!’ states Clean Origin’s website.

LGDs are currently perceived as a distinct territory in the jewellery market and not a direct competition to mined-natural diamonds. ”They are a great starting point for consumers aspiring to own diamond jewellery”, says Smit Patel, Convener, Lab-Grown Diamond Panel, Gem & Jewellery Export Promotion Council (GJEPC). “According to estimates, the natural diamond pipeline is valued at about $80 billion in terms of diamond jewellery at the retail level”, he adds. But, the LGD market share seems to be growing steadily and is expected to account for 10% (estimated at 19.2 million carats) of the entire worldwide diamond market by 2030, according to statistics by GJEPC.

Talking numbers

“We believe that diamonds are not only forever, but for everyone”, explains Mads Twomey-Madsen, Vice President, global communications and sustainability at Pandora, which sells jewellery in more than 100 countries through 6,800 points of sale. “As an example, we see that many of our customers would like to buy a diamond ring for themselves to mark an important milestone in their lives, which will take diamonds beyond the classical engagement and wedding occasions”, he adds.

“Lab-grown synthetic diamonds are flawless! Natural diamonds on the other hand, will have some impurities — though invisible to the naked eye — it is this natural distinction that helps in identifying them. This is also why natural diamonds are perceived to have a higher intrinsic value, and continue to be in greater demand,” says Ramesh Kalyanaraman, Executive Director, Kalyan Jewellers, adding that through both categories can “co-exist separately,” Kalyan focuses on “all-natural, certified diamonds.”

So far, “very few Indian jewellers are retailing lab-grown diamonds,” says Smit, adding that the majority of cut and polished LGDs are exported to the US. India, however, is picking up pace in the production and exports of LGDs.

“India produces 30 lakh rough LGDs, per year”, says Shashikant Dalichand Shah of LGDJPC. India exported USD 1.3 billion worth of CVD lab grown diamonds in 2021-22. “In terms of acceptance of LGDs there is no problem but there isn’t enough awareness,” says Parag Agarwal, CEO of Fiona Diamonds, which sells LGDs directly to customers, online in India. He adds, “We cater mostly to professionals, self-purchasing women who don’t perceive jewellery as an investment.”