The State Bank of India (SBI), the country’s largest private lender, has devised a policy to finance lab-created diamond makers in what could prove to be a major breakthrough for the emerging industry.
SBI is the first Indian lender to develop such a policy and reflects a continuing industrial shift in the country which is the world leader in cutting and polishing services.
To date, India produces around 15% of the world’s lab-created diamonds.
Earlier this year, the Indian Gemstone and Jewelery Export Promotion Council (GJEPC) encouraged the government to better promote the laboratory products sector. The GJEPC predicted that India could produce over 150 million carats per year with better resources.
The loans will largely be provided to finance the import of lab-created diamond-creating machinery.
According Rapaport News, âIt will not fund the purchase of lab-grown crude yet. Lending will primarily be through term loans â credits offered for business expansion and capital goods with a fixed repayment schedule â rather than working capital loans.
With Russian crude shut out of much of the international market following the invasion of Ukraine in February, India has been hit harder than most due to reduced supply.
Earlier this year, more than 250,000 people were forced to take unpaid leave due to a lack of supply from cutting and polishing factories.
In order to cope with this volatility, the Economic period reports that many major jewelry houses in India are establishing new factories in Surat to produce lab-created diamonds.
âThe man-made diamond lobby is getting stronger day by day,â a source told the newspaper.
“Although the volumes are still only a fraction of natural diamonds, SBI probably thinks this is an emerging business.”
Globally, demand has steadily increased in recent years. In 2018, lab-created diamonds accounted for less than 5% of total global diamond jewelry sales.
In 2022, the product is expected to exceed 10% and if this pace were to continue, 20% is possible by the end of the decade according to experts such as diamond industry analyst Paul Zimnisky.
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