Finance Minister Nirmala Sitharaman has announced that the production of lab grown diamonds in the country will be encouraged via an R&D grant to an IIT for five years and reduction in import duties of raw material. During the Budget 2023 presentation, the FM said the government will look to boost indigenous production of such diamonds and reduce import liability.

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Lab grown diamonds have the same optical and chemical properties as natural diamonds, but they are much more environmentally friendly as the energy, cost and resource intensive process of mining is not required to obtain them.

Govt to provide R&D grant to one of the IITs to encourage indigenous production of lab-grown diamonds in a bid to reduce imports: FM

— Press Trust of India (@PTI_News) February 1, 2023

What kind of support will be provided by the government?

The FM announced two ways in which the government will support the sector. One of the IITs will be given a research and development grant to facilitate innovation in the industry through development of machines and equipment. The other support is provided in the form of a reduction in import duty on the raw materials required to make the lab diamonds.

“Lab grown diamonds is a technology and innovation driven sector with high employment potential,” Sitharaman said during the Budget presentation today.

“To encourage indigenous production of lab grown diamond seeds and machines and to reduce import dependency a research and development grant will be provided to one of the IITs for 5 years,” she added.

She added that the proposal to reduce the cost of imports of lab grown diamond seeds will be introduced in the second part of the Budget speech.

The move has been widely welcomed by the sector as it will reduce the cost of production of lab grown diamonds in the country.

Vijay Mangukiya, Regional Chairman of the Gems and Jewellery Promotion Council (GPEC) told IANS that the move will help to grow the current 1-2 percent share of lab grown diamonds in the sector to 5 percent share in the next two to three years.

With increase in production, the sector is expected to create employment opportunities.

What are lab grown diamonds?

Lab grown diamonds also known as engineered diamonds or cultured diamonds are grown and developed in highly controlled laboratory environments. The production involves the use of advanced technological processes that duplicate the conditions under which diamonds naturally develop in the mantle, beneath the Earth’s crust.

These lab created diamonds are made of actual carbon atoms which are arranged in the characteristic diamond crystal structure. Since they are made from the same material as natural diamonds, they exhibit the same optical and chemical properties as natural diamonds.

Most lab grown diamonds are created from the tiny carbon seeds obtained from pre-existing diamonds. Through advanced technology, either extreme pressure and heat or a special deposition process known as CVD is created to mimic the method of natural diamond formation.

Some manmade diamonds created through deposition may also undergo pressure and heat treatment after they are grown. These diamonds can also be made into fancy coloured diamonds by adding small amounts of specific trace elements which are present during the growth phase of a naturally coloured diamond.

In the case of lab grown diamonds, the exact composition of trace elements may slightly differ from natural diamonds. However, a manmade diamond can only be distinguished from natural diamonds using specialised equipment that can detect minute differences in trace elements and crystal growth.

As lab grown diamonds are getting recognised all over the world, the value and popularity of these diamonds is increasing in the market.

Advantages of Lab Diamonds

Lab grown diamonds usually cost 30 to 40 percent less than their natural counterparts of the same quality.

Lab grown diamonds are environment friendly as they do not require mining, which degrades ecological balance in nature and is highly resource intensive.

Lab grown diamonds have the same exact atomic makeup as natural diamonds, thus they offer the same quality, clarity, colour and grading as natural diamond.

The popularity of lab grown diamonds has skyrocketed worldwide and behemoths like DeBeers are also getting in on the lab grown game.

The production of lab grown diamonds has the potential to generate R&D jobs.

Disadvantages of lab diamonds

Since lab grown diamonds have no supply constraints, their value depreciates with time. Hence, the resale value of the diamonds drops and it gets more costly to upgrade in the future.

Lab grown diamonds create sustainability problems of their own as the heat and pressure needed to create a lab grown diamond requires huge amounts of energy.

(Edited by : C H Unnikrishnan)

First Published:Feb 1, 2023 5:51 PM IST