Odisha’s Rs.1,000 Crore Lab-Grown Diamond Push Poses Fresh Challenge to Surat Industry

SURAT : The world’s largest diamond cutting and polishing hub, Surat, is set to face a fresh challenge in the rapidly expanding lab-grown diamond (LGD) sector after the Odisha government approved three major LGD production projects worth ₹1,000 crore. Industry stakeholders fear the move could intensify competition and affect employment and investment in Surat’s thriving lab-grown diamond ecosystem.

For the first time, Odisha has opened its doors to large-scale lab-grown diamond manufacturing by approving three production units. To attract investors, the state government has also announced electricity subsidies, a significant incentive since nearly 80% of the production cost in lab-grown diamond manufacturing is linked to power consumption.

The development comes at a time when the global lab-grown diamond market is already facing pressure due to oversupply and falling prices. Industry experts believe the additional production capacity in Odisha could further intensify price competition.

“The Odisha government’s incentive policy is a matter of concern for Surat and Gujarat. Subsidies on electricity can encourage manufacturers to shift investments to other states, directly impacting employment in Surat’s lab-grown diamond sector,” said Bhavesh Tank, Vice President of the Diamond Worker Union Gujarat.

He added that Surat’s diamond industry, which has been the backbone of Gujarat’s economy for over five decades, is witnessing such aggressive inter-state competition for the first time.

Industry leaders also fear that if more manufacturing units move outside Gujarat, the state’s export earnings from the gem and jewellery sector could decline. At the same time, Odisha’s expansion is expected to generate new employment opportunities for gemologists and skilled workers within the state.

Despite the emerging competition, Surat continues to remain India’s leading hub for diamond manufacturing. However, industry observers believe policy support and competitive incentives will be crucial to maintaining the city’s leadership in the fast-evolving lab-grown diamond sector.