Explained: What Are Lab-grown Diamonds And How Are They Produced

In the 2023-2024 Union Budget, the Ministry of Finance has placed a special emphasis on Laboratory-Grown Diamonds (LGD). The Budget aims to increase the production of lab-grown diamonds in India by reducing the basic customs duty on seeds used in their production. The duty on seeds for rough lab-grown diamonds will be reduced from 5% to zero.

Additionally, a five-year research grant will be provided to one of the Indian Institute of Technologies (IITs) for research and development in this field. The Ministry of Finance has also proposed the creation of new tariff lines for synthetic diamonds to improve their identification and facilitate trade, as well as to clarify the eligibility for concessional import duty.

What are Lab-grown diamonds?

Unsplash/Representational image

Lab-grown diamonds, also known as synthetic diamonds, are artificially manufactured diamonds that have the same chemical and physical properties as naturally occurring diamonds. They are produced in a laboratory setting, rather than formed over millions of years under the Earth's surface.

The first LGD was created in 1954 by scientists at a General Electric research laboratory in New York.

They are commonly used for industrial applications due to their hardness and strength. They are ideal for use as cutters and in other tools and machines that require these properties.

In electronics, pure synthetic diamonds are used as heat spreaders for high-power laser diodes, laser arrays, and high-power transistors due to their excellent thermal conductivity.

How are they produced?

The production of lab-grown diamonds involves two main methods: the High-Pressure High Temperature (HPHT) method and the Chemical Vapour Deposition (CVD) method.

Unsplash/Representational image

The HPHT method involves exposing a seed diamond and pure graphite carbon to extremely high pressure and temperatures of around 1,500 degrees Celsius.

The CVD method involves heating the seed diamond inside a sealed chamber filled with a carbon-rich gas. The gas reacts with the seed, slowly building the diamond over time.

lab-grown diamonds have a lower environmental impact

According to The Hindu report, the production of lab-grown diamonds has a lower environmental impact compared to the extraction of natural diamonds. Open-pit mining, which is a common method of mining natural diamonds, leads to a significant amount of waste and environmental degradation, including air and water pollution and soil erosion.

On the other hand, lab-grown diamond production can be carried out in a controlled environment, reducing the risk of negative impacts on the environment.

According to a report by Diamond Foundry, a manufacturer of environmentally conscious lab-grown diamonds, it takes ten times more energy to extract a natural diamond from the earth than to create a lab-grown diamond.

India and the diamond industry

India is the world¡¯s largest exporter of diamonds. India accounts for 19% of total diamond exports worldwide. It is said that 9 out of every 10 diamonds in the world journey through India as they are cut and polished in the country.

Unsplash/Representational image

The diamond industry of India is very much dependent on imports of raw materials and 50% of the country¡¯s total gems & jewellery exports include diamonds only.

Surat, Gujarat is a major global centre for diamond manufacturing. The United States is the largest market for cut and polished diamonds, followed closely by China.

In November 2022, India's overall exports of gems and jewellery amounted to 2.43 billion US dollars, a 2.05% increase from the previous year.

The diamond market of India is largely unorganised and is yet to recover from Covid-19 induced lockdown, which forced factories to shut down for several months. A major portion of a total of approx. 4.64 million workers in this sector, are employed in the diamond business.

Before the Russia-Ukraine war, the gross imports of India¡¯s rough diamonds jumped by 84% between April and January this fiscal to $14.83 billion. Further, a surge of 62% $20.06 billion was also reported through exports of cut and polished diamonds. This was India¡¯s overall merchandise trade, during this period.

Big Image courtesy: Unsplash/Representational image