India’s Lab-Grown Diamond Sector Surges as Demand Grows

India is witnessing a significant rise in its lab-grown diamond industry, which is expanding rapidly due to increasing demand for more affordable gemstones. Analysts estimate the sector is growing at nearly 15 percent annually, as the nation strives to establish itself as the world’s leading integrated diamond hub.

Cost-Effectiveness and Ethical Appeal

For jeweller Shaurya Taneja, the future of diamond sales is evident in his showroom. Nearly half of his inventory now consists of lab-grown diamonds, which offer a cost-effective alternative to mined stones. These synthetic diamonds can be priced between 50 to 90 percent less than their natural counterparts. For instance, a one-carat mined diamond that retails for around US$1,000 can be matched with a lab-grown version costing only a few hundred dollars.

This notable price difference is particularly appealing to younger, budget-conscious consumers. Taneja notes, “You won’t be too sad if the diamond falls out or if you lose a diamond, because you could just get it as easily replaced and at a cheaper price point.” Beyond affordability, lab-grown diamonds also appeal to consumers concerned about the ethical implications of traditional diamond mining, which has been associated with human rights violations and environmental degradation.

Current industry data indicates that India’s lab-grown diamond market, valued at approximately US$400 million, has the potential to expand more than threefold to over US$1.5 billion within the next decade. Although India is unlikely to surpass China, which currently leads in global synthetic diamond production, it possesses unique advantages that could enhance its market position.

Leveraging Cutting and Polishing Expertise

India already excels in cutting and polishing 90 percent of the world’s diamonds, whether they are natural or synthetic. Much of this activity occurs in Surat, located in the western state of Gujarat, where lab-grown diamonds are cut and polished alongside their mined equivalents. The country is making significant investments in Chemical Vapour Deposition (CVD) technology, a high-tech method that allows diamonds to be cultivated layer by layer in controlled laboratory environments.

With government support, increased research and development, and reduced import duties on diamonds, India aims to become a comprehensive provider for lab-grown gems. According to Olya Linde, a partner at global management consulting firm Bain & Company, India’s strength lies in its ability to manage the entire value chain—from growing diamonds to cutting and ultimately selling finished jewellery in markets like Europe and the United States.

Despite the promising growth of lab-grown diamonds, traditional perceptions pose challenges within India. Many consumers still associate natural diamonds with long-term value, particularly for weddings and heirlooms. Rakesh Bacchawat, a New Delhi resident, stated, “Diamonds are an investment for our children’s future. I consider lab-grown diamonds artificial, so I don’t think their value will appreciate much in the future.”

Similarly, another resident, Nitesh Jain, expressed skepticism, saying, “Real diamonds can’t be compared to lab-grown diamonds. If you can’t afford it, buy the smallest diamond you can, but buy a real diamond.” This sentiment highlights a cultural attachment to natural diamonds that may slow the transition to lab-grown alternatives, despite their advantages.

As the lab-grown diamond industry in India continues to evolve, it faces the dual challenge of appealing to a new generation of buyers while navigating traditional values that uphold the significance of natural diamonds. With significant market potential and a growing infrastructure, the future of India’s lab-grown diamond industry appears bright yet complex.