The moves comes after the Finance Minister Nirmala Sitharaman, in the Union Budget 2023, announced the government's intention to encourage the production of eco-friendly lab-grown diamonds via an R&D grant and reduction in import duties on raw material.
The Commerce Ministry on Thursday, February 23, approved the establishment of the India Centre for Lab-Grown Diamonds (InCent-LGD) at IIT Madras at an estimated cost of Rs 243 crore over the next five years. This follows Finance Minister Nirmala Sitharaman's announcement in the Union Budget that the government will encourage the production of lab-grown diamonds in the country via an R&D grant to an IIT for five years and reduction in import duties on raw material.
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"It has been decided to give this project to IIT-Madras after a joint determination of its capabilities by a joint committee of (the) government, Export Promotion Council and industry representatives. It is proposed to establish an India Centre for Lab grown Diamond (InCent-LGD) at IIT Madras with the estimated cost of Rs. 242.96 crores over 5 years," the Commerce Ministry said in a statement.
Besides the jewellery industry, lab-grown diamonds are used in computer chips, satellites and 5G networks as they can be used in extreme environments due to their potential to operate at higher speeds while using less power than silicon-based chips. LGD has vast application in field of defence, optics, jewellery, thermal and the medical industry.
The proposal, recommended by the Project Appraisal Committee under the chair of Commerce Secretary Sunil Barthwal, has been approved by Minister for Commerce & Industry, Textiles, Food & Public Distribution and Consumer Affairs Piyush Goyal.
The ministry said Union Budget will support the project during following five years.
The aim of this project is to provide, in mission mode, technical assistance to the industries, and entrepreneurs in the country — and promote indigenous manufacturing of both chemical vapour deposition (CVD) and high pressure and high temperature (HPHT) systems along with other recipes for expanding the lab-grown diamond (LGD) business at the upstream end.
Research efforts would make the technology available for startups at affordable cost, increase employment opportunities and increase exports of LGD, thus playing a significant role in fuelling India’s economic growth, the ministry said.
During the Budget 2023 presentation, the FM said the government will look to boost indigenous production of such diamonds and reduce import liability.
The FM had announced two ways in which the government will support the sector. One of the IITs will be given a research and development grant to facilitate innovation in the industry through development of machines and equipment. The other support will be provided in the form of a reduction in import duty on the raw materials required to make the lab diamonds.
This is a significant step towards promoting indigenous production of lab-grown diamonds in India, which could help reduce the country's dependence on imported diamonds and support the growth of the domestic diamond industry.
Lab-grown diamonds are an eco-friendly and sustainable alternative to mined diamonds, as they are produced using advanced technology and do not require extensive mining and processing operations.
The gems and jewellery sector plays a significant role in the Indian economy, contributing around 9 percent to India’s total merchandise export. Over the past decade, there has been several positive developments in the gem and jewellery sector globally. One of the major technological developments in this sector has been lab-grown diamonds (LGD).
Globally, the market stood at $1 billion in 2020, the lab-grown diamond jewellery market is expected to rapidly rise to $ 5 billion by 2025 and exceed $15 billion by 2035.