The brands highlighted that the term inaccurately equates LGDs with diamond simulants like cubic zirconia (crystalline form of zirconium dioxide), which differ significantly in quality and composition. LGD contrasts with simulants which are less expensive and lack the authenticity of real diamonds.
In a letter to CCPA, a copy of which was reviewed by ET, the venture-funded jewellery firms emphasised that LGDs share the same physical, chemical, and optical properties as naturally mined diamonds, making them virtually indistinguishable to the naked eye.
“…we urge that the regulatory framework for LGDs focus on clear, transparent labelling and consumer education rather than imposing overregulation. This would allow the LGD industry to thrive, align India with global standards, and position the country as a leader in sustainable diamond production,” the firms said.
The CCPA recently convened a stakeholder consultation, chaired by chief commissioner Nidhi Khare to address consumer protection measures in the diamond sector. The talks included the distinct labelling and certification of LGDs from natural diamonds, and whether the term ‘synthetic’ is appropriate, given concerns about potential consumer confusion and unethical sales practices.
India’s LGD sector is experiencing rapid growth, bolstered by rising consumer adoption and investor interest. For instance, Giva raised Rs 255 crore in a Series B funding round led by Premji Invest, with participation from Epiq Capital and Edelweiss Discover Fund. Aukera secured Rs 26.7 crore from Fireside Ventures, and Jewelbox raised Rs 3.5 crore earlier this year from JITO Incubation and Innovation Fund.
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The domestic lab grown diamond jewellery market is estimated to surge fourfold from $299.9 million in 2023 to $1.19 billion by 2033, according to market intelligence firm Future Market Insights.Also Read: Lab-grown diamond exports expected to grow by 7-9% in FY25: Report
Despite this robust growth, concerns have emerged about unethical practices, such as mixing LGDs with natural diamonds in jewellery without disclosure, encouraged by the price difference between the two. The CCPA had urged diamond makers to clearly distinguish LGDs and disclose their production methods to protect consumers.
The companies noted that synthetic diamond simulants are much cheaper than LGDs due to their reliance on inexpensive, man-made raw materials. By contrast, LGDs typically require seed diamonds—small slivers of mined diamonds—which are more expensive.
Lab-grown diamonds are man-made and created in controlled laboratory settings using advanced technologies that replicate the natural diamond formation process. Unlike natural diamonds, which form over billions of years under intense heat and pressure in the Earth’s mantle, LGDs are created within weeks using methods like Chemical Vapor Deposition (CVD) or High-Pressure High-Temperature (HPHT).
The government announced a five-year research grant in the FY24 budget to encourage indigenous LGD production. IIT Madras was selected for the initiative, with plans to set up the India Centre for Lab-Grown Diamonds at Rs 242.96 crore.
The government has allowed 100% foreign direct investment in the sector under the automatic route since 2022.
However, the domestic LGD industry faces challenges such as declining prices due to overcapacity and continued imports while natural diamond prices have also dropped due to lower demand from China and increased competition from LGDs.
LGDs are gaining significance beyond jewellery, finding applications in various industries due to their durability, thermal conductivity, and chemical stability. They are used in industrial tools for cutting and drilling, high-performance electronics like semiconductors and heat sinks, and optical systems for aerospace and defense. LGDs are also key in medical devices for surgical tools and implant coatings, among others.