DeBeers, GJEPC Focus on Reviving Natural Diamond Market

Surat : The allure of lab-grown diamonds has cast a shadow over India’s natural diamond industry, which has flourished for over seven decades. With prices of lab-grown diamonds plummeting by 65% in just a year, the industry is grappling with the harsh reality of its impact. The once-thriving natural diamond trade now faces an uncertain future, exacerbated by weak demand from key markets like the United States and China, ongoing global conflicts, and the disruptive rise of lab-grown alternatives. In response, De Beers and the Gem & Jewellery Export Promotion Council (GJEPC) recently convened in Mumbai to strategize on revitalizing the natural diamond market.

A Market in Crisis:

The crash in lab-grown diamond prices has sent shockwaves through the natural diamond industry, particularly in Surat, the heart of India’s diamond trade. Prices have plummeted from ₹60,000 to ₹20,000 per carat within a year, creating a market rife with uncertainty. The decline in prices, coupled with weak consumer confidence and overproduction, has left the industry in disarray.

Govindbhai Dholakia, Managing Director of SRK Exports, echoed these concerns during a recent event in Surat, admitting that “Lab-grown diamonds disrupt the natural diamond trade.” His words underscore the gravity of the situation, as the traditional diamond industry struggles to maintain its footing in a rapidly changing market landscape.

De Beers and GJEPC’s Strategic Response:

In an effort to counteract the challenges posed by lab-grown diamonds, De Beers and GJEPC have initiated discussions aimed at strengthening the Indian market for natural diamonds. The meeting in Mumbai brought together top industry officials, including Shweta Harit, Global Senior Vice President of De Beers; Amit Pratihari, Vice President of De Beers Forevermark India; and Jodine Bolden, Director of Education at De Beers. Representing GJEPC were Diamond Panel members Nilesh Kothari and Milan Choksi, along with Executive Director Sabyasachi Ray.

The discussions highlighted the need for renewed focus on the Indian market, particularly in educating consumers about the unique value of natural diamonds. De Beers emphasized the importance of leveraging industry expertise to address market-specific challenges, with a particular focus on supporting retailers in smaller towns and cities. The joint initiative between De Beers and GJEPC aims to communicate the intrinsic value of natural diamonds and encourage retailers to diversify their offerings, ensuring that the natural diamond trade remains viable.

Overproduction and Oversupply:

A report by the Global Trade Research Initiative (GTRI) sheds light on the overproduction crisis plaguing the lab-grown diamond industry in India. The number of units producing lab-grown diamonds has skyrocketed to 10,000, leading to an oversupply that has significantly driven down prices. GTRI’s report also points to issues such as low consumer confidence, problems with imports, and a lack of proper regulation, which have collectively contributed to the industry’s struggles.

India’s lab-grown diamond industry is heavily reliant on imports, with 98% of rough lab-grown diamonds coming from Hong Kong and the UAE. In the fiscal year 2024, India imported rough lab-grown diamonds worth $1.14 billion and exported cut and polished diamonds worth $1.3 billion. However, the price disparity between lab-grown and natural diamonds—₹20,000 per carat for lab-grown versus ₹3.5 lakh per carat for natural—has made it increasingly difficult for manufacturers to repay loans taken to buy lab-grown diamond-making machines.