Diamonds have lost their glitter in Surat, the world's largest diamond cutting and polishing center. The Surat Special Economic Zone (SurSEZ), India's leading gems and jewellery SEZ, witnessed a staggering 64% decline in diamond and jewellery exports during 2023-24 compared to the same period in 2021-22. This marks the biggest export value drop ever for SurSEZ, even surpassing the challenges posed by the COVID-19 pandemic.
While industry leaders point fingers at the global economic crisis, the Russia-Ukraine war, and geopolitical tensions in Israel, a more pressing concern is emerging: competition from lab-grown diamonds. These stones are posing a significant threat to SurSEZ's dominance in key markets like the United States, Europe, Latin America, and China.
Data reveals a stark decline. Diamond and gems and jewellery exports during 2023-24 reached Rs 13,747 crore, a sharp drop from the Rs 26,513 crore recorded in 2022-23. This translates to a loss of Rs 12,766 crore for the SEZ. Notably, diamonds and jewellery contribute over 95% of SurSEZ's annual exports, highlighting the industry's critical role in the zone's economic activity.
"Lab-grown diamond jewellery is becoming a major competitor to natural diamond jewellery," says a leading diamond company owner in Surat. "Consumers, particularly in the US and China – India's biggest diamond markets – are increasingly opting for lab-grown diamonds due to their significantly lower prices, often more than 90% cheaper than natural diamonds." This shift in consumer preference is posing a serious threat to the traditional diamond industry in Surat.
"The situation in Surat highlights a larger trend within the global diamond market. As lab-grown diamond technology continues to advance, the cost gap between them and natural diamonds is narrowing. This, coupled with growing environmental concerns surrounding natural diamond mining, is influencing consumer choices" said Aniruddha Lidbide, diamond industry analyst.
