Lab-Grown Diamond Business: Market Potential, Government Schemes and Future Growth

PROJECT DESCRIPTION

Why Startups and New Entrepreneurs Should Choose This Industry

Graphite is one of the cheapest forms of carbon you can buy. Subject it to 5- 6 GPa of pressure at 1,300- 1,600°C and it becomes a real diamond (same hardness, same brilliance, same chemistry as a diamond that's been mined). That one transformation is why the business has moved out of the research lab and onto the factory floors in Surat, Mumbai and a whole host of other smaller industrial towns.

For a first gen entrepreneur it's all very practical really. The raw material by weight is minimal so storage and logistics are very light. You can run a press room 24/7 and the finished stones are priced per carat so you've got a very high output value per unit. There's also consistent demand throughout the year as you've got engagement rings, everyday jewellery and fashion pieces to keep the order book full well into the year after the wedding season.

India has an edge that very few of the other new entrants can match. It has one of the deepest pools of cutting and polishing talent in the world so a grower can sell their rough to a local cutter or indeed build the entire chain and take the margin in between.

Market Size, Share and Export Potential

Industry research reports have the global lab grown diamond market at circa USD28-29bn in 2025 with forecasts of around 8-11% annual growth through to 2032 (one report even has it at USD60bn). Those are all estimates and vary from report to report.

The Indian numbers are better. The provisional data from the GJEPC for FY 2025-26 shows polished lab grown diamond exports at about 18.8 million carats, versus just under 16 million carats of cut & polished natural diamonds. That was 0.1 million carats in 2015-16.

Government trade data (Department of Commerce and ITC Trade Map) tells the same story. India's share of world lab grown diamond exports has increased from around 28% in 2022 to nearly 36% in 2025 (beating both Hong Kong and the UAE). Shipments in the first 5 months of 2026 were 7.05 million carats as opposed to 6.70 million carats of natural stones.

Exporters are establishing routes into the UAE, the UK and Hong Kong as well as the US. Gems and jewellery exports were at ₹2.44 lakh crore in 2025 (6.3% of merchandise exports) and supported nearly 75 lakh livelihoods, the Union Home Minister has said.

Manufacturing Process: From Graphite to Gem

The graphite route is known as HPHT (high pressure, high temperature) and it essentially replicates in a matter of days what the earth does over a very long period of time.

Raw material preparation: the high purity graphite is pressed or machined into discs and tubes. A metal solvent (an iron-nickel or iron-cobalt alloy) is also prepared, along with small diamond seed plates.

Cell assembly. Seeds are mounted on a pad at the cooler end of a ceramic or pyrophyllite capsule. The metal solvent is on top of them and the graphite carbon source at the hot end with a graphite heater all the way around the assembly.

Pressing. The capsule goes into the cubic press. Pressure is raised first to about 5 to 6 GPa and only then is the temperature raised to 1,300 to 1600°C. The order is important in that you don't want to heat the seeds up before the pressure is stable as that can damage the seeds.

Growth. The metal melts and the graphite dissolves. Carbon travels through the molten metal along the temperature gradient and deposits layer by layer on the seeds. A run will last from a few days to a few weeks depending on the size and quality you're after.

Cooling and recovery: pressure and temperature are ramped down very slowly to prevent the crystals cracking. The capsule is then opened and the metal is dissolved in a hot acid bath, leaving the rough diamonds completely untouched.

Sorting and cutting. The rough stones are sorted by size, colour and clarity and then sawn or laser cut, bruted and polished facet by facet.

Testing and grading: the finished stones are tested on spectroscopic equipment, laser-inscribed with a reference number and then certified by a recognised gemmological laboratory.

Machinery and Equipment Required

• Cubic (six-anvil) HPHT press with hydraulic power pack
• Tungsten carbide anvils, pyrophyllite and ceramic cell components
• Programmable power supply with PLC-based temperature and pressure control
• Chiller and water-cooling circuit, plus DG set and UPS for uninterrupted power
• Graphite and catalyst processing set: mixer, compaction press, vacuum furnace
• Acid recovery station with fume extraction
• Laser sawing machine and bruting machine
• Blocking and polishing machines with scaife wheels
• Spectrometer, microscopes, precision balance and laser inscription unit

Government Schemes and Incentives

• Duty free import of lab grown diamond seeds (extended in the Union Budget 2026-27 to March 2028) so the key imported input remains duty free.
• India Centre for Lab-grown Diamond (InCent-LGD) at IIT Madras, with a ₹242 crore five year research grant to develop the indigenous machines, seeds and growth recipes.
• PMEGP: credit linked subsidy of 15 to 35% for eligible manufacturing projects up to ₹50 lakh.
• CGTMSE: collateral free credit guarantee cover for eligible micro and small enterprises.
• Mudra Yojana: loans up to Rs 20 lakh under the Tarun Plus category for working capital and equipment.
• Startup India: DPIIT recognition for eligible ventures, with tax benefits, easier compliance and access to the Fund of Funds.
• Stand Up India: bank loans of Rs 10 lakh to Rs 1 crore for SC/ST and women entrepreneurs setting up their first enterprise.
• State industrial policies (notably Gujarat's) which provide capital and interest subsidies to eligible units.

Major Players in the Industry

In India the well known growers and manufacturers are Bhanderi Lab Grown Diamonds, Kira Diam and Greenlab Diamonds (all based in Surat) and Limelight is a well known Indian lab grown jewellery brand. Abroad De Beers Group sells lab grown jewellery under the Lightbox brand. WD are the lab grown diamond brand in the US. In China Henan Huanghe Whirlwind, Zhongnan Diamond and Sino-Crystal are the leading cubic press HPHT producers.

A sensible starting point for a newcomer would be a small bank of presses, a finishing tie-in with an existing cutting unit and certification on the first batch.