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Due to local overproduction and more than enough supply from abroad, the Indian lab-grown diamond industry faces major issues as the prices fell by more than 65 per cent in the previous year. The Global Trade Research Initiative (GTRI) report stated that the prices went down from Rs 60,000 per carat to as low as Rs 20,000 per carat. The report highlighted that the number of lab-grown diamond-producing units in the country has gone up to 10,000, leading to tougher competition and oversupply.
The report shed light on the issues faced by the industry such as significant falls in prices, lacklustre consumer demand along with the competition from increased imports. The country is currently going through the issue of overproduction in this segment as well as the lack of regulation, the report stated.
GTRI has suggested several measures to tackle the issues. In order to address the challenges, there is a need for the Centre to set clear and consistent rules when it comes to standardizing quality. Certain steps such as certification, and issuance of quality control orders to check the import quality along with investments in research and development (R and D) for better results in production processes have been suggested by the report. It also talked about reducing costs and enhancing the quality of lab-grown diamonds.
As far as the imports of rough lab-grown diamonds are concerned, nearly 98 per cent of them come from Hong Kong (63.7 per cent) and the United Arab Emirates (UAE) (28.5 per cent), as per the report. In the financial year 2024, the country imported USD 1.14 billion worth of rough lab-grown diamonds against the export of cut and polished ones worth USD 1.3 billion.
GTRI highlighted that the price drops are posing difficulties for manufacturers to repay the loans which they have taken to buy the machines. The cost of natural diamonds is around 3.5 lakh per carat and this fall in prices is leading the manufacturers towards financial struggles.
