Ahmedabad/Mumbai: The gradual rise in the use of synthetic diamonds by jewellers is becoming a cause of concern among the diamond traders in Surat—an industry whose export size is pegged at around Rs70,000 crore.
The cost of synthetic or chemically treated diamonds is 30% lower than natural
diamonds. It is difficult to differentiate between real and synthetic diamonds, because of which an end-consumer could be cheated.
Diamonds aren’t always forever: A jeweller uses a loupe to look at a 1.5 carat diamond in his workshop. Synthetic or chemically treated diamonds, which are 30% cheaper than natural diamonds, are gradually making their way into the Indian market, thus becoming a cause of concern for diamond traders.
Although synthetic diamonds have been around since the 1980s, they now have acquired a modest 5-7% marketshare, whose value is pegged at Rs750-1,000 crore.
Synthetic diamonds also are made from carbon in the mines, but they are different from natural diamonds.
Natural diamonds are formed when carbon is exposed to a certain pressure and temperature. During formation, if the carbon is not exposed to the right temperature and pressure, the diamond that shapes up will be of poor quality.
Some mining companies dig out this half-baked carbon and expose them to the required pressure and temperature in a laboratory. The diamond that is formed through this process is synthetic, but similar to natural diamond in hardness.
“They (synthetic diamonds) are gradually making their way into the Indian market,” said Pravin Nanavaty, a diamond trader and former president, South Gujarat Chamber of Commerce and Industry.
“The problem is not at all with big-sized diamonds but with small ones. The Indian diamond business is mainly dominated by small and medium-sized diamonds. Many of those trading in diamonds also do not know about the difference and it may happen that by mistake they may sell a synthetic diamond as a natural one. If this trend continues, it has a potential of giving the diamond business a bad name.”
Synthetic diamonds currently are not a threat to De Beers, said a senior De Beers official who did not wish to be identified. “It is the small diamond mining companies that are facing the competition,” the official said. “We planned out a strategy to know the business about synthetic diamonds and the conclusion was that its presence is very small. Nonetheless we are keeping track of it.” An email sent to De Beers about the issue went unanswered.
Traders said synthetic diamonds find their way to India from Russia and the US.
“If synthetic diamond gets mixed while making jewellery, the customer may not get right priced jewellery,” added Nanavaty. “The customer is not getting right value for money. In the long run, this could affect credibility of the diamond business. Some fly-by-night operators may even misuse the knowledge and may sell synthetic diamonds as real ones.”
Govind Dholakia, a Surat-based diamond trader, said cleaning up the diamond industry of fly-by-night operators presents an opportunity rather than a challenge.
“Many have entered the business without the knowledge, so once people get to know of this thing, they will be more aware,” he said. “Customers would demand certification and buy only from authentic showrooms, rather than going to any one. In the short and medium terms, it is a challenge because customers will have to be more careful about the way they buy diamonds.”