In Budget 2023 speech on 1 February, Finance Minister Nirmala Sitharaman announced that the government has eliminated the 5% customs duty on seeds utilized for producing rough Lab-grown Diamonds (LGD).
The objective behind this decision is to reduce the production cost of Lab grown diamonds. Sitharaman referred to LGDs as an emerging sector with high potential for employment and innovation. They are considered eco-friendly as they are man-made and at the same time possess the same optical and chemical characteristics as natural diamonds.
The budget speech also stated a research and development grant will be awarded to one of the IITs for five years in order to promote the domestic production of LGD seeds and machines and to decrease import dependency.
Summary of Budget 2023 Announcement on Lab-grown Diamonds:
The government is giving priority to the production of LGDs, which is a technology-driven emerging industry. As part of this, a 5-year grant of Rs 242 crore has been awarded to IIT Madras for research and development (R&D) to encourage the domestic production of LGD seeds and machines and reduce import dependency.
Moreover, to further support the industry, the government has eliminated the import duty on the raw materials utilized to make LGDs. Earlier, a 5% customs duty was levied on LGD seeds, but this duty has also been removed.
What are Lab Grown Diamonds?
Lab grown diamonds are created using advanced technology that mimics the natural diamond growing process, resulting in a synthetic diamond. There are two processes for producing Lab-grown diamonds: High Pressure High Temperature (HPHT), which is primarily used in China, and Chemical Vapor Deposition (CVD), which is commonly utilized in the US and India.
Why is the government promoting lab grown diamonds in india?
The Indian government has been supporting lab-grown diamond production in India for several reasons. One of the primary reasons is that lab-grown diamonds are a more sustainable and eco-friendly alternative to mined diamonds.
Lab-grown diamonds can be produced without the environmental and social impact associated with traditional diamond mining, such as deforestation, water pollution, and human rights abuses.
Additionally, the Indian government sees lab-grown diamond production as a way to boost the country's economy and create jobs. India has a long history in the diamond industry and is a major diamond cutting and polishing center, so the shift to lab-grown diamonds provides a new opportunity for growth and innovation in the industry.
Furthermore, lab-grown diamonds are generally less expensive than natural diamonds, making them more accessible to a wider range of consumers. This increased demand for lab-grown diamonds can benefit the Indian diamond industry by providing new markets and revenue streams.
Overall, the Indian government's support of lab-grown diamond production reflects a desire to promote sustainable and innovative practices in the diamond industry, while also creating economic opportunities for its citizens.
According to Vaibhav Karnavat, the Founder of House of Quadri, the Budget proposal will not only enhance India's ability to cut, polish, and supply rough diamonds to the rest of the world, but it will also promote employment by encouraging the growth of homegrown diamonds. Karnavat believes that lab-grown diamonds are the choice of the future.