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Jean-Marc Lieberherr, CEO of the Diamond Producers Association (DPA), who spent close to a decade working for Rio Tinto, believes India will not be affected by the growing popularity of synthetic or laboratory-grown diamonds.
“The consumer value proposition of synthetic diamonds to Indian consumer is not strong,” he said, adding that India is a very traditional market when it comes to jewellery and the value it carries.
The world’s biggest diamond company, De Beers recently announced it would start selling synthetic diamond gemstones.
According to Lieberherr, synthetic diamonds are an industrial product that can be replicated; it has decorative and not intrinsic value. “I think what De Beers is doing is making it very clear,” Lieberherr said.
Most of the synthetic diamonds are manufactured in China and sold in the US, with India market being far less affected. However, Indian diamantaires are worried about the authenticity of diamonds they buy for further processing.
According to Lieberherr, the incentive to mix real and synthetic diamond is strong and, hence, detection is important. Hence, DPA has partnered with US-based UL, safety consulting and certification company, to create a test protocol for diamond testing machines, including those made in India as at least two Indian manufacturers has been on DPA’s list.
Marketing diamonds
DPA was created in 2015 with an idea to promote diamonds as a category in the backdrop of falling demand for diamonds globally. DPA has eight members, including the world’s largest miners Alrosa, De Beers and Rio Tinto, and players such as Canada’s Dominion Diamond and Lucara Diamond, Botswana-based Gem Diamonds, Zimbabwe’s Murowa Diamonds and PetraDiamonds having mines in South Africa and Tanzania.
Over the past three years, DPA has been investing in various marketing activities. Most of the investments are done in the US, which accounts for around 45 per cent of global demand for diamonds, and China, the second largest market accounting for around 16 per cent.
Out of $70 million marketing investments committed by DPS for this year, only around $9-10 million will be invested in India. Despite around 90 per cent of diamond sold globally are cut and polished in India, Lieberherr points out, the country currently accounts only for just 6-7 per cent of global demand making it also one of the most perspective markets going forward.
India’s diamond market has seen a negative growth in 2017 (calendar) year, according to Lieberherr, despite it being the strongest year ever globally.
Multiple factors, including demonetisation and GST roll-out, rupee depreciation and several cases of fraud have caused stress in the industry. Lieberherr, however, believes the slowdown is temporary and the growth will come back.
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