The budget proposals aimed at encouraging the production of lab-grown diamonds (LGD) including an import duty cut for the raw material will help create a self-reliant diamond industry, industry representatives said on Wednesday.

The budget presented by Finance Minister Nirmala Sitharaman addressed a major concern of the LGD industry regarding the 5 per cent import duty on the `seeds’ used in the production, they said.

“The government has taken some steps towards the betterment of this completely ‘Atma Nirbhar’ industry with a lot of export-potential. Making it indigenious to India and making sure it grows is a very important step,” said Smit Patel, convener of the LGD panel of the Gem & Jewellery Export Promotion Council (GJEPC).

The industry generates a lot of jobs and has the potential to grow four times its current size, said Patel, director of Surat-based Greenlab Diamond.

“Growers of LGDs outside India did not have to pay any import duty on seeds, and it was detrimental for Indian growers to pay such a duty. Growing (diamonds) in India is important…This technology has a lot more potential in the future, so if IITs help us make the process cheaper and faster, it will be a very big boost for the industry,” he added.

The seeds used to grow diamonds will now be treated at par with rough diamonds which are already exempted from import duty, said Vijay Mangukiya, Regional Chairman, Gujarat, GJEPC.

The GJEPC had also requested the government to abolish import duties on the machinery used in the manufacturing of lab-grown diamonds, he added.

Surat-based diamond industry leader Dinesh Navadiya said LGD manufacturing is slowly increasing in India, and an estimated Rs 10,000 crore-worth cut and polished diamonds exported last financial year had been grown in the country.

“Most of the imports are from China, but Surat is becoming a hub for lab grown diamonds as well. The government’s move will give a new boost to the fledgling industry,” he said.

Surat in south Gujarat polishes 90 per cent of the world’s diamonds.

While natural rough diamonds are the main staple for the majority of units located in the city, several units have also started polishing LGDs, Navadiya said.

Lab-grown diamonds are created through two processes — High Pressure High Temperature (HPHT), which is prevalent in China, and Chemical Vapor Deposition (CVD).

In her budget speech, Finance Minister Nirmala Sitharaman said that with the depletion of deposits of natural diamonds, the industry is moving towards LGDs and it holds huge promise.

She proposed to reduce basic customs duty on seeds used in their manufacture.

She also said that one of the Indian Institutes of Technology (IITs) will be provided a research grant for five years to encourage indigenous production of LGDs. PTI KA KRK KRK

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