Indian Lab-Grown Diamond Manufacturers Keep Growing

A combination of factors is driving growth in the industry despite the precipitous drop in prices across the board.

Kira Diam, which bills itself as the largest grower of CVD lab-grown diamonds in the world, installed a 25 megawatt solar plant to power its growing operations. It is one of a number of Indian companies investing in the lab-grown diamond segment despite the stones’ declining price.

Mumbai—India, which has for long worn the mantle of the world’s largest manufacturer of polished natural diamonds, is well on its way to becoming the largest grower and manufacturer of lab-grown diamonds.

The country’s growing capacity has increased in leaps and bounds, perhaps 10 times in about five to seven years, and polished exports have soared.

Growth continued over the past year despite the major decline in lab-grown diamond prices, which fell as much as 70-90 percent in many categories, according to industry analysts.

Smit Patel, a director of Greenlab Diamonds and organizer of the Gem & Jewellery Export Promotion Council’s Lab-Grown Diamond Subcommittee, said, “The lab-grown diamond industry in India is clearly a rapidly expanding segment from whichever angle you look at it.

“There is all-around positivity reflected in the significant rise in the number of lab-grown diamond growers and reactors, as well as in number of people employed by the cutting and polishing segment too.”

Export data compiled by GJEPC underscores this.

In 2023, exports of polished lab-grown diamonds increased by more than 50 percent in volume terms to 6.45 million carats (2022: 4.28 million carats), even as they dropped by almost 20 percent in value terms to $1.38 million (2022: $1.72 million).

Imports of lab-grown rough followed a similar pattern.

In 2023, imports of lab-grown diamond rough rose by 31 percent in volume terms to 31.7 million carats (2022: 17.7 million carats), while in value terms they fell by 24 percent to $1.12 billion (2022: $1.47 billion).

It is widely acknowledged that most new entrants to the market had anticipated the price fall and factored it into their plans.

“The price changes have brought the high-profit phase based on ‘low-hanging fruit’ to an end,” Patel said.

“Yet, growth has continued as improvements in technology coupled with manufacturing at scale means that well-managed operations deliver satisfactory margins even at the lower price levels that now prevail.”

Vijay Desai, a committee member of Surat’s Lab-Grown Diamond Association, said, “Lab-grown diamond manufacturing in India is primarily focused on gem-quality goods for jewelry, and this market has shown significant growth and enormous potential. The city has seen major investments over the last two to three years and there are at least 8,000 machines in operation today.”

Manish Jiwani of Ecolight Diamonds, which set up a production unit in Mumbai a little over a year ago, pointed out that apart from Surat, there are also lab-grown diamond growers in Mumbai and Jaipur.

Those associated with the industry believe that India currently has anywhere between 8,000 to 10,000 reactors, predominantly producing diamonds using the chemical vapor deposition, or CVD, process.

This is double the 4,000 to 5,000 machines observers estimated were in operation about two to three years ago.

This rising rough production (and increasing imports) is being easily absorbed by cutting and polishing units due to a decline in the output of polished natural diamonds.

It is widely estimated that almost 90 percent of companies that earlier cut only natural diamonds have now entered the lab-grown diamond space.

Larger players have bifurcated their units and shifted some part of capacity to polishing lab-grown diamonds while many smaller companies have moved their entire operation to lab grown.