Union finance minister Nirmala Sitharaman in her price range speech on Wednesday introduced a five-year analysis grant for one of many Indian Institutes of Expertise (IITs) to encourage the indigenous manufacturing of lab-grown diamonds (LGD), and a discount in customs responsibility on the seeds and machines used to provide these treasured commodities.
“Lab Grown Diamonds (LGD) is a technology-and innovation-driven rising sector with excessive employment potential. These atmosphere pleasant diamonds have optically and chemically the identical properties as pure diamonds,” the finance minister mentioned.
Lab-grown diamonds are made in a lab utilizing cutting-edge expertise that replicates the pure diamond rising course of and the result’s a man-made diamond that’s chemically, bodily, and optically the identical as these discovered beneath the earth’s floor.
A disruption within the import of tough diamond items to be processed by Surat’s diamond business after Russia invaded Ukraine has led to renewed efforts to encourage the usage of lab-grown diamonds.
Lab grown diamonds might be created by two processes – Excessive-Stress Excessive Temperature (HPHT), which is utilized in China, and Chemical Vapor Deposition (CVD), which is utilized in USA and India.
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“India is a worldwide chief in slicing and sharpening of pure diamonds, contributing about three-fourths of the worldwide turnover by worth. With the depletion in deposits of pure diamonds, the business is shifting in the direction of Lab Grown Diamonds (LGDs) and it holds big promise. To grab this chance, I suggest to cut back primary customs responsibility on seeds used of their manufacture,” the FM mentioned in her price range speech.
Surat is the hub for diamond business, the place over 85-90% of the world’s roughs are processed. The business employs shut to eight lakh individuals and is a significant contributor to India’s gems and jewelry exports of USD 39 billion for 2021-22, in line with information by India’s Gems and Jewelry Export Promotion Council (GJEPC).
India’s exports of polished lab-grown diamonds had been USD 274 million, USD 473 million, USD 637 million and USD 1,293 million throughout 2018-19, 2019-20, 2020-21 and 2020-21 respectively. Annual development throughout the identical durations was 72%, 35% and 103%, respectively, in line with GJEPC.
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These diamonds are 70% cheaper as in comparison with mined diamonds, mentioned Dinesh Navadiya, regional president of GJEPC and president of Surat Diamond Affiliation.
“The announcement made by the FM in her price range is a optimistic step for the diamond business. The lab-grown diamond exports have already doubled this 12 months as in comparison with FY22,” he mentioned.
India exports polished lab-grown diamonds to the USA, Hongkong, UAE, Israel, and Belgium. The USA accounts for round 67% of India’s exports adopted by Hongkong with a share of 14%.
“The grant offered to IIT for lab-grown diamonds is optimistic. The phase has seen a steep 54% development in exports on-year and accounted for five% of complete diamond exports YTD23,” Crisil mentioned in a tweet on Wednesday.
Dr Snehal Patel, CEO of Surat based mostly Dungrani Lab Grown Diamonds, one of many main firms in India for producing LGD, mentioned if the import responsibility on equipment is decreased, it’s going to give an enormous enhance to the business.
“Any step taken by the federal government for selling lab-grown diamonds is welcome. Surat has the benefit over different cities for slicing and sharpening diamonds. As an alternative of relying on imported roughs, the business right here will flip to processing LGD. Presently there are about 7-8 giant firms in Surat and 20-25 small institutions for producing LGD,” mentioned Patel.