Lab Grown Diamonds

Context: Budget 2023-24 has introduced incentives for lab grown diamonds.

About Lab Grown Diamonds (LGDs)

Lab grown diamonds (also known as lab created diamonds, manmade diamonds, engineered diamonds, and cultured diamonds) are grown in highly controlled laboratory environments using advanced technological processes that duplicate the conditions under which diamonds naturally develop when they form in the mantle, beneath the Earth’s crust.
These manmade diamonds consist of actual carbon atoms arranged in the characteristic diamond crystal structure. Since they are made of the same material as natural diamonds, they exhibit the same optical and chemical properties.
Lab Grown Diamonds is a technologically and innovation driven emerging sector with high employment potential. These environment friendly diamonds which have optically and chemically the same properties as natural diamonds.

Mining Free: These diamonds are produced in laboratories. Hence, they are an environmentally responsible choice as a no mining is required.
Quality: Lab Grown Diamonds have same physical, chemical and optical properties as mined diamonds.
Value for Money & Affordable: Lab grown diamonds offer excellent value. They are more cost-effective than natural diamonds of comparable size and quality.
Scarcity of diamonds: As natural diamonds become scarce due to depleting reserves and escalating costs.
Strengthening India’s Gems & Jewellery Industry: India is a global leader in cutting and polishing of natural diamonds, contributing about 3/4th of global turnover by value. With the depletion of natural diamonds, the industry is moving towards Lab Grown Diamonds.

Lab Grown diamonds are made in laboratories with a seed of natural diamonds, which is a slice of another diamond – on which the LGD is created. It takes less than month to make a distinctively shaped crystal of Lab Grown Diamond.
There are two methods by which LGDs are created: (i) Chemical Vapour Deposition (CVD) method (ii) High Pressure, High Temperature (HPHT) method.
High Pressure, High Temperature (HPHT) method: This process mimics the high-pressure, high-temperature conditions that occur under the Earth to form a natural diamond. The seed and graphite carbons are exposed to extreme temperatures (1,500^oC) and with extremely high pressures to make LGDs. This method can also enhance the colour of diamonds making them colourless, pink, green, blue or yellow. Diamonds produced by this method may have some impurities of Boron or Nitrogen. This method is popular in China.

Chemical Vapour Deposition (CVD) method: It is a chemical process in which the seed is heated up to 800^oC in a sealed chamber filled with molecules of carbon-rich gas such as methane. These gas molecules are broken down into carbon and hydrogen atoms, which get deposited on the seed giving it a shape of square, tabular diamond crystal. This process also requires heat or irradiation to give the crystal a colour effect. Diamonds produced by this method most chemically pure diamonds i.e., free from impurities of nitrogen and boron. CVD method is more popular in India.

Laboratory grown diamonds require advanced testing in a gemmological laboratory to be identified with certainty.

Grant for R&D: To encourage indigenous production of LGD seeds and machines and to reduce import dependency, a R&D grant will be provided to one of the IITs (IIT Madras) for five years.
Relief in Customs duty: Budget 2023-24 has abolished customs duty on imports of seeds used for manufacturing of rough lab-grown diamonds. This will boost domestic manufacturing of LGDs and reduce imports of LGDs.
Implications of Fiscal support: Fiscal support provided for LGDs is aimed at boosting exports of LGDs from India and to reduce dependence of imports for key inputs i.e., seeds and equipments.
LGDs in India: In India, share of LGDs in overall diamond business is just 2-3% with LGDs being used majorly for jewelleries and exports. About 80% of cut and polished LGDs are exported, while only 20% are consumed globally.
Trends in LGD trade: India imported rough LGDs worth Rs 7,656 crore in April-December 2022 and exported 10,587 crores of LGDs in the same period. US & Europe are key markets for India’s CVD labs grown diamonds. With further government support, LGD industry will become competitive globally.

Diamond stimulants, such as cubic zirconia and moissanite, look like diamonds but are not true carbon crystals. Simulants do not have the same chemical and physical properties as natural diamonds and therefore sell at much lower prices than lab created diamonds.
Moissanite is a gemstone born from stars and was first discovered in a crater created by a meteorite in Arizona, USA. They are composed of crystal of silicon carbide and not of carbon as diamonds. However, they appear like Diamonds.
Natural Moissanite is incredibly rare on Earth. Hence, most moissanite available today is laboratory created. Moissanite, referred to as a diamond simulant, is engineered to give the illusion of similarity to diamonds, but is compositionally and visually quite different from a real diamond.