Ahmedabad: Union Finance Minister Nirmala Sitharaman in her Funds 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. She additionally introduced a discount in customs obligation on the seeds and machines used to supply the valuable commodity.
“Lab-grown diamonds is a technology-and innovation-driven rising sector with excessive employment potential. These environment-friendly diamonds which have optically and chemically the identical properties as pure diamonds,” Sitharaman stated.
Lab-grown diamonds are made utilizing 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 using lab-grown diamonds.
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Lab-grown diamonds will be created by two processes – Excessive-Strain Excessive Temperature (HPHT), which is utilized in China, and Chemical Vapor Deposition (CVD), used within the US and India.
“India is a world chief in slicing and sprucing of pure diamonds, contributing about three-fourths of the worldwide turnover by worth. With the depletion in deposits of pure diamonds, the business is transferring in the direction of lab-grown diamonds and it holds enormous promise. To grab this chance, I suggest to scale back fundamental customs obligation on seeds used of their manufacture,” the minister stated.
Surat is the hub for the diamond business, the place over 85-90% of the world’s tough diamonds are processed. The business employs near 800,000 folks and is a significant contributor to India’s gems and jewelry exports of $39 billion for 2021-22, in keeping with knowledge by India’s Gems and Jewelry Export Promotion Council (GJEPC).
India’s exports of polished lab-grown diamonds had been $274 million, $473 million, $637 million and $1,293 million throughout 2018-19, 2019-20, 2020-21 and 2020-21, respectively. Annual progress throughout the identical durations was 72%, 35% and 103%, in keeping with GJEPC.
These diamonds are 70% cheaper than mined diamonds, stated Dinesh Navadiya, GJEPC regional president and president of the Surat Diamond Affiliation.
“The announcement made by the FM in her Funds is a constructive step for the diamond business. The lab-grown diamond exports have already doubled this yr as in comparison with FY22,” stated Navadiya.
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India exports polished lab-grown diamonds to the US, Hong Kong, the UAE, Israel, and Belgium. The US accounts for round 67% of India’s exports, adopted by Hong Kong, with a share of 14%.
“The grant supplied to IIT for lab-grown diamonds is constructive. The section has seen a steep 54% progress in exports year-on-year and accounted for five% of complete diamond exports YTD23,” capital market firm, Crisil stated in a tweet on Wednesday.
Dr Snehal Patel, CEO of Surat-based Dungrani Lab Grown Diamonds, one of many main corporations in India for producing such diamonds, stated if the import obligation on equipment is decreased, it should give an enormous increase 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 sprucing diamonds. As an alternative of relying on imported roughs, the business right here will flip to processing lab-grown diamonds. Presently there are about 7-8 massive corporations in Surat and 20-25 small institutions for producing them,” stated Patel.