Advantages of investing in Diamonds!

May 16, 2023

Recently Kama Jewelry said, the dream of owning a diamond is an aspiration for everyone. However, its affordability is finite just like the supply of the most sought-after precious stone. The formation of natural diamonds happens across a span of millions of years and is found in limited zones of the earth’s mantle.

Thus, it has a halo and exclusivity around it. However, with the advent of lab-grown diamonds (LGDs), it is now possible to own a diamond as it is relatively less expensive than its natural counterparts. Kama Jewelry has released a media press note stating the advantage of investment in both natural diamonds as well as lab-grown diamonds.

Speaking on the investment in natural and lab-grown diamonds, Colin Shah, MD, Kama Jewelry said, “Investment in diamonds is an art, as one needs to factor in many aspects. The investment is long gestation, but a reliable one. An investment in the right gem can fetch huge gains. Lab-grown diamond on the other hand may not provide returns, it helps saves cost and also gives the sense of owning a precious stone”.

The demand for LGDs has seen a rise across markets due to their price variability and availability. India has recorded a multi-fold rise in the sale of lab-grown gems in the past few years, where LGDs accounted for 12.5% of the total polished diamond exports. India witnessed a rise in exports of polished lab-grown diamonds worth $1.68 billion in FY23, whereas exports of cut and polished diamonds were $ 22 billion. The USA and UAE accounted for almost 65% of studded gold jewellery.

The Union Budget 2023-24 gave a tremendous boost to the LGDs segment by announcing a cut on import duty on the seeds used to make a lab-grown diamond. The step was announced as a measure for India to be a leader in not just polishing but also manufacturing, the finance minister also announced a grant to the Indian Institutes of Technology (IITs) to drive the growth of LGDs in India.

Relative cost advantage: Lab–grown diamonds are less expensive than naturally mined diamonds of comparable quality. One can purchase much larger and quality diamonds on a given budget as the supply chain for lab-grown diamonds is much more efficient.

As a result, over a period of the last five years, the prices of LGDs have decreased phenomenally, in some cases by 70% whereas the demand has witnessed a significant enhancement. This price affordability is driven by easy availability due to decentralized manufacturing and processing. Lab-grown diamonds are a great starting point for consumers aspiring to own diamond jewellery.

On an average, prices of lab-grown diamonds up to one carat are nearly 70-80 per cent cheaper than natural diamonds.

Easy availability but no exclusivity: Lab–grown diamonds are created in a lab under a pre-defined situation with the help of sophisticated machines. Contrary to naturally-mined diamonds which are dug from the earth. Hence, exclusivity and rarity can never be replaced.

These two can complement each other to suit the customers’ desires and match their aspirations. Although these diamonds are pretty identical to the naturally mined ones all laboratory-grown diamonds can be detected using professional verification instruments. In addition, for consumers wanting to be sure about what they are buying, there are legal definitions, advertising guidelines, and certifications to ensure that consumers are correctly informed.

Rare, limited and exclusivity: While we discussed the easy availability of lab-grown diamonds. One of the biggest advantages of natural diamonds is the exclusivity, and limited supply so an investment made has the chance of a higher appreciation. Citing an example of artwork, the price of an art piece by a renowned artist has risen multi-fold due to their exclusivity and limited supply.

Similarly, the mined diamonds like the red and other coloured ones make it limited in supply and so is the appreciation in their price. As mentioned earlier, natural diamonds never lose value and cater to a different consumer profile. However, Lab–grown diamonds can claim to be a sustainable alternative supported by the evidence of their social footprint.

For the aspirational consumer Lab-grown diamonds are shaping the course of the global jewellery industry due to their versatility. They are here to conquer and prevail as a successful alternative choice for consumers in India and globally.

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