The rising allure of lab-grown diamonds

Adrija Majethia had her engagement ring picked out in 2017 years before she picked talent manager Nisarg Malde to be her fianceacute For their engagement in 2023 the couple who lives in Dadar Parsee Colony chose labgrown diamonds fitted to designs of their choiceChetna Valia had forever wanted to buy solitaires for her ears and gift a pair to her daughter as well This year working within a budget the Matungaresident was able to buy a pair each as well as rings to go with itmdashall studded with cultivated diamondsPiciStockRahul Roy had been ldquothreatening to proposerdquo to his partner Gauri Bhure for a while The Bandraresident finally ldquosealedrdquo the deal with a manmade diamond five years ago while on holiday in GoaAre labgrown diamonds LGDs pushing out old sparklers to steal the spotlight on ring fingers ears and clavicles Vantage Market Research valued the Indian LGD market at 261 billion Rs 22353 crore in 2023 and projected it to grow to 831 billion Rs 71000 crore by 2032 They were also identified as a major growth area in the 202324 Union Budget with great potential for ldquoMake in Indiardquo to become more selfreliant across the entire diamond value chain A series of supportive measures recommended include reduction in import duty of LGD seeds as well as research and development grant to an IIT for five yearsWhat does this foretell for the luxury market Experts predict a few years of churn after which the market will settle into two types of gem buyersmdashluxury and fastfashionWhatrsquos likely to influence buyers in the near future is the Consumer Affairs Ministryrsquos announcement in November that it is mulling on regulations to ensure that labgrown diamonds can only be marketed as ldquosynthetic diamondsrdquo to prevent confusion among buyersMatungaresident Chetna Valia fulfilled her longcherished dream of owning solitaires this year with lab diamonds She could fit in a pair of earrings and a ring for herself and her daughter within a budget PicAshish RajeSliding into the rows upon rows of jewellery showrooms in Bandra West are small boutiques proudly announcing labgrown diamonds with an eye on buyers who are increasingly financially and ethically conscious Yet five years ago after Roy first read about cultivated diamonds in a news report and decided to source one for his proposal to Bhure he had research online extensively until he found Fiona Solitaires in Bandra ldquoGauri is from the social sector so I knew she would appreciate thisrdquo says the 45yearold ldquoIt was my way of saying lsquoHere you go you socialresponsibility personrsquordquoThe human eye cannot discriminate between LGD and natural diamonds yoursquod need to take a peek through the specialised machines that can detect nitrogen atomsmdashmined ones have a higher concentration of these atoms and in a different molecular composition than LGDsLavanya Mohan Keyur Mehta and Ricky VasandaniThat they are in no way inferior to their natural cousinsmdashbut at 15 to 20 per cent of their costmdashis what finally convinced to Valia a 64yearold homemaker to buy LGDs ldquoI already have a natural diamond set which has sentimental value and spoke to many family jewellers who assured me one could not tell the differencerdquo she says ldquoA single onecarat natural solitaire could come up to R8 lakh For much less I was able to buy myself and my daughter a pair as well as a ring each I want to make bangles next labgrown diamonds are fulfilling the aspiration of the middleclass to own solitairesrdquoCurrently retail prices for labgrown diamonds generally range from 65000 to 85000 per carat as per Solitario an LGD brand ldquoThis pricing has remained stable over timerdquo says Ricky Vasandani CEO and coFounder Not crafted by geological factors such as pressure time and actual geology LGDs can be grown to specific clarity colour and size So you can buy a large diamond for a fraction of the cost And you can make as many of them as you like so price is not driven by scarcityThough not the driving factor the low price of LGDs became another validation in Royrsquos choice of ring ahead of his proposal ldquoWhat I didnrsquot know then is that Gauri is very careful about spendingrdquo he says ldquoShe finds the lsquoengagement ring formularsquo that it should cost X times your monthly salary absurdrdquoAdrija Majethia and Nisarg Malde chose lab diamonds for their engagement rings mainly due to the price pointDiamonds can be a womanrsquos best friend for investment and liquidity but only as long as they are natural The question of buyback value is a very important one to Indian buyers While the mined gem may not be as good an investment as gold most retail stores offer current market pricemdashwith a 10 to 15 per cent cutmdashfor their own piecesExchange is usually at 100 per cent market value says Prajwal Jain whose family has been in the diamond business for a 100 years and owns several stores in Kandivli and Borivli ldquoMost people buy natural diamonds only from trusted family jewellers like usrdquo he says ldquoWe assure them quality certification and buybackrdquoThe underpinning for this is the trust factor For buyers keen on testing their astrological compliance with the ldquoenergyrdquo of the stone whether it ldquosuitsrdquo them and brings fortune itrsquos a major plus point if the seller is willing to exchange or refund it Traditionally if yoursquove bonded with your family jeweller over generations they will lend you the intended stone to sleep with under your pillow to see what dreams it bringsLGD are not as good of an investment but neither are they a complete waste of money ldquoWe realise our customers not only seek beautiful jewellery but also peace of mind when making such significant investmentsrdquo says Solitario CEO Vasandani over email ldquoWe offer 90 per cent lifetime cash back on the invoice value Additionally our 100 per cent lifetime exchange policy on invoice value further allows customers to upgrade their purchase or switch styles without losing valuerdquoA cursory glance at the exchange and buyback policies of most LGD players shows that like Vasandani they know the importance trust and connect plays in the Indian sona bazaarThe depreciation in worthmdashbuyback is at invoice value not the market ratemdashdoesnrsquot seem to be an issue for some LGD buyers for now at least Given its sentimental value Majethia never intends to sell her ring and neither does Royrsquos wife BhureldquoAs Kutchhisrdquo says 28yearold Majethia ldquowe donrsquot invest in diamonds anyway They depreciate in value the minute you walk out of the store I chose labgrown for my engagement ring because it was more costefficient and I was more set on the design than the gemrdquo The 28yearold originally wanted emeraldsmdasha gem both her and Malde 33 prefermdashbut is too soft for daily wear ldquoI work with dogs all dayrdquo says the canine behaviouristValia who owns both natural diamonds and LGDs says ldquoIf I had to resell my new labgrown diamonds I will at least get value for the goldrdquoThis vast gap of invoice value versus market price will eventually cleave buyers though Keyur Mehta a toplevel executive for one of the worldrsquos largest diamond suppliers says that after the current churn a shortfall in mined diamonds caused by international affairs such as a ban on Russian diamonds the natural diamond market could settle into the status of luxury watches ldquoWhen quartz watches came in the 1970srdquo he explains ldquoprices of handwound watches fell for a while Then Swiss companies began selling them at a higher price as a luxury good which is what the market is nowrdquoKey selling factors for LGDs are the ethics though concerns are being raised about the carbon emissions from the processes of production CVD chemical vapour deposition and HPHT high pressure high temperature Mehta an executive with a diamond MNC admits that while companies have to adhere to the labour production and environmental policies of the country they operate in the fact that natural diamonds can only be extracted from the earth means one cannot bypass the disruptive mining processLGDs bypass unethical practices such child labour unfair pay and human rights violations On the other hand some of the sheen of natural diamonds has been tarnished by controversy over ldquoconflict or blood diamondsrdquo which are mined in war zones and been linked to funding of civil wars terrorism and dictatorship in Angola Liberia Sierra Leone the Democratic Republic of Congo and Ivory CoastldquoThe environmental impact of labgrown diamonds is significantly lower than that of mined diamondsrdquo says Vasandani ldquoCustomers can wear their diamonds with pride knowing they are making a responsible choice that supports ethical practicesrdquo Natural diamond retailers Mehta and Jain both admit that their customers are rarely aware of or care about the ethicality of the stoneIt certainly mattered to Bhure though ldquoI resisted the idea of marriage for a long time for what it signified in a patriarchal conservative structurerdquo says the CSR head of a tech company ldquoThat Rahul got me a labgrown diamond showed that he lsquogot mersquordquo Working as she does on ground in nonurban areas Bhure does not wear her engagement ring every dayChartered Accountant Lavanya Mohan who decodes personal finance for women on social media says eventually it will all come down to personal preference ldquoNatural diamonds are only an investment when they are extremely large say 10 carats and upwardsrdquo she explains ldquoor when they are of cultural or historical significance such as a Golconda diamond or belonging to a Mughal emperor or have a rare quality such as coloured diamondsrdquoldquoThe savings come in larger sizesrdquo she says of cultivated diamonds ldquowhere one can get solitaires of one or two carats at a fraction of the rate at cut and clarity we would have never expected beforerdquoThe caveat is that diamonds may be bought as investment but they are rarely treated with that sort of solvency Shruti Mathur teaches at a primary school in Delhi and only found out about LGDs last year when she asked the price of a dainty pair of diamond baalis her friend was wearing ldquoIt was only about R90000rdquo she saysThe 47yearold owns a simple solitaire ring gifted by her husband for a landmark birthday Seven years later she enquired at a store about its price and was told its value had appreciated by R17000 ldquoEven though I donrsquot intend to sell itrdquo she says ldquoit makes me feel good to know how much its price had increasedrdquoHer grandmother too opted for natural stones when she gifted her five grandchildren including Mathurrsquos offspring identical diamond sets as inheritanceWould Mathur buy LGDs for daily wear ldquoFrankly Irsquom not surerdquo she says admitting the ethics would also not be a big draw Itrsquos not like LDGs cost small money either so if she were spending that much shersquod like to know itrsquos growing in priceAnd what if she were to buy heritage pieces for her descendants ldquoIt would have to be naturalrdquo she says without needing to think about it ldquoIt would make me happy to know the diamonds could help them if soldrdquoRs 65KCost of a onecarat labgrown solitaireRs 7LAKHCost of a onecarat natural diamondRs 22K CROREValuation of Indian LGD market in 2023Rs 71K CROREEstimated market size by 2032 Source Vantage Market Research and retailers