Surat : Lab-grown diamond industry faces uncertain future, merchants throw stones on road amid falling prices

Surat : The lab-grown diamond (LGD) industry in Surat, a city known for its diamond trade, is facing an uncertain future as diamond prices have experienced an alarming nosedive on the international market. In just six months, the cost of lab-grown diamonds has plummeted from a high of $350 per carat to a meager less than $20 per carat, sending shockwaves throughout the industry.

The frustration and disillusionment among diamond traders dealing in lab-grown diamonds in Surat came to a head recently when a few exasperated traders emptied their diamond packets onto the road at Mini Bazaar in Varachha, a renowned diamond trading market.

The act caused a commotion as bystanders, many of whom were also traders, scrambled to collect the diamonds, initially mistaking them for natural stones. It was only after close examination through diamond loupes that the truth became apparent – these diamonds were lab-grown and worth a mere Rs 500 per carat.

Satish Khunt, a prominent diamond trader in Mini Bazaar, Varachha, recounted the chaotic scene: “People in our market were running here and there to search for the diamonds strewn on the road. Many got a handful of diamonds from the road. But, when they checked with their loupes, they were highly upset as the diamonds were the cheap LGDs.”

It must be remembered that during his recent visit to the US, Prime Minister Narendra Modi gifted a 7.5 carat ‘green’ LGD diamond to first lady Jill Biden. This 7.5 carat diamond was crafted at Green Lab, a leading LGD diamond company located at the Gems and Jewellery Park at Ichhapore.

Sources within the Surat diamond industry revealed that diamantaires in the region had invested an estimated Rs 15,000 crore in establishing cutting-edge LGD production facilities. These LGDs, or lab-grown diamonds, are cultivated in laboratories using diamond seeds. The seeds are subjected to a meticulous process involving precise temperature control, chemical gases, and other factors to replicate the formation of natural diamonds found deep beneath the Earth’s surface.

Unfortunately, many diamond traders in Surat and Mumbai find themselves in a precarious position as LGD prices have plummeted drastically in recent months. Diamonds that were once purchased for $350 per carat are now fetching less than $20 per carat in the market.

Rajesh Patel, a seasoned diamond dealer, shed light on the industry’s trajectory: “There was a craze for LGDs among consumers in the United States (US), which prompted Surat’s diamantaires to invest crores of rupees in LGD technology. Now, the bubble has burst, and LGD prices have hit rock bottom due to a recession in the US and dwindling demand.”

A diamond industry analyst added, “LGDs are now primarily used in bling jewelry as a cost-effective alternative to natural stones. American buyers have lost interest in LGDs as they lack the resale value associated with natural diamonds. However, the concerns of LGD diamond dealers in Surat are genuine, and they are venting their frustration by discarding diamonds on the road.”