The demand for jewellery made of lab-grown diamonds (LGD) is steadily moving up with jewellers offering attractive buybacks to woo customers from high-cost natural diamonds.
The buyback offer provides customers with an assurance that they can sell back their diamond jewellery at a good price in the future if they want to buy new jewellery or liquidate their investments.
With natural diamond mines fast depleting, diamond prices are holding firm despite the weak demand. Consumers are slowly adopting LGD as an alternative for natural diamond.
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Value proportion
Vipul Shah, Chairman, Gems and Jewellery Export Promotion Council, said the irresistible value proposition of being able to own a large diamond at a fraction of a cost compared to its natural counterpart has boosted LGD jewellery demand in recent years in India, the US, China and West Asia.
This growing demand has led to the rapid expansion of lab-grown diamond manufacturing, resulting in increased supply and subsequently lowering prices, he said.
The global LGD market was valued at $22 billion in 2021 and is projected to touch $56 billion by 2031, growing at a CAGR of 10 per cent from 2022 to 2031, as per industry estimate.
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Exports up
In the FY23, polished LGD exports from India increased 37 per cent to ₹13,466 crore against ₹9,808 crore logged in the previous year, as per GJEPC data.
Pooja Sheth Madhavan, Managing Director, Limelight Diamonds, said it offers 80 per cent buyback on LGD and 100 per cent in value if exchanged for other jewellery just like any other precious gemstone. One carat of LGD ring costs about ₹90,000-₹1 lakh and the same in natural diamonds can cost over ₹6-8 lakh, she said.
On comparison of quality, Madhavan said LGDs grown through CVD (Chemical Vapour Deposition) method are the purest form of a diamond with better shine and lustre, which is rare in natural diamonds.
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Colin Shah, Managing Director, Kama Jewellery, said unlike natural diamonds, LGD is readily available and the cost difference between them is huge at 70-90 per cent. The resale value will depend on the buyback a retailer gives to their consumer.
Industry body GJEPC expects to create over 10 lakh jobs to process nearly 15 crore carats of lab-grown diamonds thereby achieving an export turnover of ₹40,000 crore in the near future, he added.