2019, particularly, was the year for labgrown diamonds. India, alone, witnessed a sharp rise in LGD exports worth $443 million which were up by 102% y/y. Even at the start of 2020, lab-grown diamond exports in India were up by 60% y/y, while natural diamond exports were down by 41% y/y.
Whilst the lab-grown diamond industry had seen a significant price correction in recent years with the technology evolving and the cost of technology coming down, lab-grown diamond prices, particularly CVD diamonds, have now stabilized. In fact, CVD diamonds above 1ct saw a 29% price rise in the last quarter of 2019 driven by significant demand and limited supply.
Globally, estimated at INR 13,300 Cr currently, the lab-grown diamond jewellery market is expected to rapidly rise to INR 36,000 Cr by 2023 and exceed INR 1,00,000 Cr by 2035, says a recent report by renowned analyst, Paul Zimnisky.
These hefty numbers are not just what adds on to the prospect of diamonds created using the CVD technology, the major shift in consumer consumption patterns is a great contributor to the rise in demand for lab grown CVD diamonds.
Millennials and Gen Z as purchasers of luxury including diamonds, are steering away from natural diamonds because of their higher environment and social costs and increasingly leaning towards sustainable luxury. As a result, consumers are now exploring real diamonds that are grown in laboratories as the new alternative for engagement rings as well everyday luxury wear as it comes with the added benefit of being ethical, affordable, sustainable and more environment-friendly product.
With the largest population of Millennials in the world, India is perceived to become the largest market for lab grown diamonds in the future.
India remains critical to the growth of the lab grown CVD industry
A known fact is that India and China are currently the world’s largest exporters of lab grown diamonds and that India is also one of the strongest players producing or growing the lab grown diamonds.
India particularly specialises in the CVD technology that exactly replicates the environment below the surface, above in a reactor and produces lab grown CVD diamonds – certified as the purest type of diamonds (Type IIa).
On the other hand, China produces lab grown HPHT diamonds that are created using graphite and a molten metal influx not resulting in the purest type of diamonds (NOT CLASSIFIED as Type IIa).
What is interesting to know is that in the current lab grown polished diamond production of 2 million carats, over 90% of it is under 0.18cts, majority of which are Chinese diamonds.
Whilst, so far China has progressed with significant rise in volumes of star melee diamonds, bulk production of higher quality and bigger solitaires (0.30cts and above) with the HPHT technology still remains a challenge.
India, whilst may not have achieved the same volumes yet, with its homegrown scalable CVD technology has certainly surpassed China in terms of producing superior quality (Type IIa) and bigger solitaires.
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April - May 2020