When you think of diamonds, names like Tiffany & Co. and De Beers might come to mind, given their longstanding dominance in the global industry. However, India’s association with diamonds dates back to the 5th century BC, with mentions in ancient Sanskrit texts from 320 to 296 BC.
For centuries, India was the world’s primary source of diamonds, only to be overtaken in the late 1720s when Brazil discovered its own deposits. Despite losing its position as a major producer, India remains the largest exporter of cut and polished diamonds. Now, a new shift is taking place, making India a focal point in the diamond industry once again—this time through lab-grown diamonds.
The Rise of Lab-Grown Diamonds in India
Lab-grown diamonds, once met with scepticism, have gained widespread acceptance due to their striking similarity to natural diamonds in appearance, composition, and structure. While both share identical chemical properties, their key differences lie in their formation, rarity, and environmental impact.
- Natural diamonds: Formed deep within the Earth’s mantle over billions of years under extreme heat and pressure, brought to the surface by volcanic eruptions.
- Lab-grown diamonds: Created in controlled environments using advanced processes like Chemical Vapor Deposition (CVD) and High-Pressure High-Temperature (HPHT), replicating natural formation using pure carbon, high pressure, and extreme heat.
Though indistinguishable in appearance, natural diamonds typically retain higher resale value, while lab-grown alternatives are more affordable and considered environmentally sustainable.
Indian Brands Capitalising on the Trend
The affordability and ethical appeal of lab-grown diamonds have driven several Indian brands, both legacy and emerging, into this space.
- Trent (Tata Group subsidiary, Pome): Entering the lab-grown diamond market.
- Senco Gold: Expanded into this space through its subsidiary, Sennes Fashion Limited.
- D2C brand Giva: Exploring ways to strengthen its lab-grown offerings.
- Startups like True Diamond, Solitario Lab Grown, and Aukera: Raising funds to tap into this booming market.
Key Drivers Behind the Surge
1. Affordability
Lab-grown diamonds are significantly cheaper than natural diamonds. As the carat size increases, the price difference becomes even more pronounced:
- Small lab-grown diamonds are around 60% cheaper than natural ones.
- A one-carat lab-grown solitaire can be up to 90% cheaper.
- Larger solitaires (3 to 5-carat stones) can cost 95% less than their natural counterparts.
2. Superior Quality and Designs
In recent years, the quality of natural diamonds has seen a decline:
- Many have lower clarity (often graded as SI, meaning they contain visible inclusions).
- Their colour grades have dropped, with many now falling in the J, K, I1, or I2 ranges.
Lab-grown diamonds offer superior clarity and colour, giving buyers access to higher-quality stones at a fraction of the price.
3. Ethical and Environmental Considerations
Consumers are becoming more conscious of the environmental and ethical impact of diamond mining:
- No mining required: No land destruction or labour exploitation.
- Lower carbon footprint: While lab-grown diamonds still require electricity, many manufacturers are transitioning to renewable energy sources like solar power.
Conclusion: Future of Lab-Grown Diamonds in India
India’s diamond traders are witnessing a paradigm shift, and the trend of lab-grown diamonds is only expected to grow. As more brands and startups enter this space, the country is poised to become a major player in this sector, making diamonds more accessible, ethical, and sustainable for consumers worldwide.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.
Investments in the securities market are subject to market risks, read all the related documents carefully before investing.