The impetus given to labaratory-grown diamond (LGD) manufacture by the Union Budget this week is being seen as a shining moment for the precious stone, though not necessarily in the local jewellery market, said experts in the city.
Starting this week, the Budget has reduced the basic customs duty on ‘seeds’ used in the manufacture of LGDs in a bid to popularise their production in India, reducing the customs duty from 5% to nil.
The diamonds are manufactured in laboratories, and share the same chemical composition and other physical and optical properties of their naturally occurring counterparts.
LGDs have quietly penetrated the jewellery market in recent years due to a shortage of mined natural diamonds worldwide, but general awareness about them remains low in Tier II cities like Tiruchi.
“They are an eco-friendly alternative to natural diamonds, and are more affordable, but not as an investment. Even though LGDs may not have the same resale value as natural diamonds, we must adjust to the change in technology and customer interest,” Diljit Shah, managing partner, N. Gopaldas Jewellery, told The Hindu.
Mr. Shah added that diamond ornaments generated a very small part of the demand. “Many other fields such as precision medical surgery and industrial production, require diamonds in much larger quantities. Creating diamonds in the lab will be much better for the world in the long run,” he said.
Though jewellery retailers now declare details of colour, clarity, size and weight of their products on price tags, they are less likely to speak openly about LGDs for fear of customer sentiment, as conservative buyers still prefer natural diamonds, said a synthetic stone trader in the city.
Compared to natural diamonds, which can cost up to ₹80,000 per carat, LGDs can be bought for as low as ₹30,000. Tiruchi’s once famed synthetic gems now go only for ₹25 apiece.
“Affordability is one of the main advantages of LGDs. But jewellers remain cautious because they have seen the falling market value of cubic zirconium (American diamond) since the 1980s. The wider availability of LGDs is one reason why more diamond ornaments are being advertised and sold than just a few years ago,” said J. Rajnikanth, a gemmologist and entrepreneur.
