Struggling with the ongoing geo-political and economic disturbances around the globe, the Gems and Jewellery industry is expecting the fast growing Lab Grown Diamond (LGD) market to help it tide over the low demand period. Gems and Jewellery exports from India are still waiting for a recovery in demand in the international markets. According to data provided by the Gems & Jewellery Export Promotion Council (GJEPC), between Apr 2023 – Oct 2023 overall gross export from India registered a steep decline of 23.37% from $ 23.8 billion to $ 18.24 billion.
Export of Cut & Polished diamonds stood at $ 9.96 billion compared to the export of $ 14.1 billion in the previous year, a 29.37% decline while on the other hand the gross export of Polished Lab Grown Diamonds for the period Apr 2023 – Oct 2023 registered a downfall of 25.84%, clocking $ 0.83 billion over the comparative figure of $ 1.12 billion for previous year.
According to industry players, the struggling Gems and Jewellery market is getting much needed support from the growing LGD demand in domestic markets. This can be backed by the fact that despite a 25% decline in exports LGD caratage ( cut & polished) has increased to 20 lakh in Apr-Jul 2023 (up by 5.57% compared to Apr-Jul 2022 period), while the decline in mined CPD was at 26 lakh carat. Around 10 lakh roughs are coming to India every month for LGD and this will provide adequate job work for the workers in the industry. This number is further expected to increase to 50 lakh roughs per month in coming years.
The increased LGD caratage and the decline in the exports of polished LGDs indicate that the man-made diamonds are becoming increasingly popular in domestic markets. Smit Patel, Director, Greenlab Diamonds, the largest cultivator of diamonds in the world, said, “The market conditions for the LGDs are not the same as for natural diamonds. The demand in LGD market is witnessing a rapid boom in Indian and international markets. The prices of mined diamonds are very high compared to LGDs which are not as sensitive to geopolitical and economic instabilities.”
He said, “The sales volume of the LGDs for the first half of this financial year witnessed a growth of around 200% as compared to the last year. Greenlab has continuously witnessed 400% growth since inception. We started with 40 employees and now we have more than 4000.”
Gunjan Jain, Founder, Flourish, a jewellery brand, said, “The Gems and Jewellery Industry is at the cusp of the beginning of a shift to lab-grown diamonds and moissanite. This can disrupt the traditional diamond industry, prompting adaptation to changing consumer preferences for sustainable and investment-friendly options.”
Moissanite is a naturally occurring Silicon Carbide. Natural moissanite is incredibly rare but can be synthesised in the laboratory with the CVD (Chemical Vapour Deposition) process.
In view of the lack of demand in the international markets, the diamond factories are finding it hard to run their units at their full capacity. Most of the units are functioning below 50% of the capacity. This has resulted in the job loss of thousands of workers. Bhavesh Tank, Surat Zone President, Diamond Workers’ Union, said, “The cutting and polishing workers who were earlier working with Natural diamonds are losing their jobs because of the lack of work available for workers. They are being asked to work for less hours and take longer leaves. But some of the workers who have lost their jobs are finding employment in the Lab Grown Diamond industry.” “The skill sets required to work with real or lab grown diamonds are basically the same. This segment has absorbed around 15% to 20% of the workers who had lost their livelihood,” Tank said.
The industry is hopeful that the growth potential in the Middle Eastern markets will nullify the slump in demand in markets like the US, China and Europe. According to a GJEPC spokesperson, “the Middle East market buyers are happy with quality and consistency offered by Indian exporters; plus there is an attractive 5% price differential. The growth of Indian jewellery retail segment is also providing hope for the industry. Large retailers like Malabar, Tanishq, Kalyan, Senco, PNG, etc. are exploring options of opening several new stores. There is also a shift from unorganised to organised branded jewellery.”