The cultivation of the diamond industry chain can be divided into three major links, namely rough diamond production, cutting and grinding processing, and terminal retail. China, which possesses the core technology and resources of high-temperature and high-pressure cultivation, accounts for over 90% of the global diamond production through high-temperature and high-pressure methods, making it a true producer of cultivated diamonds. India, with its mature diamond cutting and processing industry cluster, accounts for 95% of the global diamond cutting and grinding market share. The United States is a mature terminal retail market for cultivated diamonds. According to the De Beers Diamond Insight report, the United States consumes 80% of the world's cultivated diamond jewelry, The penetration rate of diamond cultivation in the United States in 2021 is about 8%.
In recent years, the cultivation of the diamond industry chain has maintained a tripartite relationship between China, India, and the United States. However, with the increasing support from the Indian government in the cultivation of diamond production and manufacturing, this situation may be broken. China, which has pricing power, will gradually lose its competitive advantage in cultivating a dominant position in diamond rough production.
Exemption from electricity tax
In November 2022, the Indian government announced the exemption of electricity tax in the production process of cultivating diamonds. The main cost of cultivating diamond manufacturing is electricity, which accounts for almost 70% of the expenditure. Dinesh Navadia, former chairman of GJEPC in Gujarat, said: "The decision to exempt the electricity tax will improve the competitiveness of Surat's diamond manufacturers in the international market, especially the competition with their Chinese counterparts."
Cancel import tax on cultivating diamond seeds
On February 1st, Indian Finance Minister Nirmala Sitharaman announced in his annual federal budget report that the import tariff for producing crystal seeds for cultivating diamond blanks will be reduced from 5% to 0 the next day. The amendment aims to reduce the production cost of cultivating diamonds in the country.
Establish and cultivate a diamond research and development center
In March, the Indian government proposed to establish an Indian Laboratory Diamond Cultivation Center (InCent LGD) at the Indian Institutes of Technology Madras Campus, with an estimated cost of 24296 million rupees, about 29 million US dollars. The purpose is to provide technical assistance to India's diamond cultivation industry and entrepreneurs, promote local research and development of chemical vapor deposition and high-temperature and high-pressure technology, and cultivate diamond manufacturing, as well as expand diamond cultivation business.
In addition, the Indian government has also promised to introduce a new Harmonized System (HS) shipping code to enable consumers to better distinguish between natural diamonds and cultivated gemstones.
In just a few months, the support of various levels of government in India to cultivate diamonds has been continuously increasing. These policies will help India extend from rough processing to synthetic manufacturing, and jewelry products in cultivating the diamond industry, all of which are at the forefront of the world.
Dr. Zang Chuanyi, doctoral advisor of Jilin University and Zhengzhou Huajing Diamond Co., Ltd., told the reporter of China Superhard material Network that according to relevant data, the output of diamonds cultivated by CVD in 2022 will be 11 million carats, and the output of diamonds cultivated under high temperature and pressure will be more than 7 million carats; It is expected that the production of CVD cultivated diamonds will reach over 19 million carats in 2023, and the high-temperature and high-pressure energy will reach over 11 million carats, almost doubling in growth.
Not only is production increasing, but the penetration rate of cultivating diamonds is also constantly increasing, making it a blue ocean market worth hundreds of billions. It is precisely because the Indian government is optimistic about the development prospects of cultivating diamonds that it has been continuously taking action in policy support. If India forms large-scale industrialization in the cultivation of diamond synthesis, it may restrict domestic synthesis manufacturers, and we will completely lose the dominant and bargaining power in cultivating diamonds.
Zhang Linlin, General Manager of Henan Tianchenzhi Diamond New Material Technology Co., Ltd., stated that China is a major consumer of diamonds. In 2021, the import amount of natural diamonds was nearly 10 billion US dollars, and the prospects for cultivating the diamond market are promising. From the perspective of the end consumer market, thanks to the coverage and promotion of CCTV and the popularization of short videos, the recognition and penetration rate of the diamond market have been greatly improved, and the market demand for cultivating diamonds among domestic consumers is increasingly high. Tianchen Diamond actively builds the designer diamond brand and promotes online new media and offline physical brand stores, resulting in good market response. In 2022, the annual production capacity of rough cultivated diamonds will reach 200000 carats, and it is expected to increase to 400000 carats by 2023.
When it comes to the Indian government's support for cultivating diamonds, Zhang Linlin said: 90% of the global diamond processing is completed in India, with over 1 million people engaged in diamond cutting and grinding, making it the world's diamond cutting and grinding center. With such a large volume, India's policy bias can be understood, but we must remain vigilant. Currently, as China's gold enters the diamond industry, there is no need to worry too much about the overall competitiveness of cultivating diamond terminal retail in China. However, in the weak cutting and grinding process, we still hope that each The local government can provide certain support based on local conditions to address the pain points and difficulties of this industry. In addition to government policy guidance, self research on cutting and grinding equipment, and the cultivation of diamond talents are also essential
Zang Chuanyi suggested that leading enterprises, capital markets and government departments should jointly lead the industry reform in order to cultivate the diamond market in China, establish a unified association alliance, and even set up a diamond financial stability guarantee fund, protect and cultivate the diamond Price system, avoid the frequency and extent of price decline like last year, restrain the industry development, maintain healthy competition, and jointly grow and strengthen the market.
At the same time, cultivated diamonds should be regarded as a standard component, no longer based on the 4C standard of natural diamonds. For example, cultivated diamonds with scores ranging from 45 to 55, such as D, E, VS, and VVS, all belong to the same level and are directly priced at one go, without detailed differentiation of carat, color, clarity, and cutting.
In addition, it is necessary to increase the research and development efforts of automated cutting, grinding, and polishing. The government should lead the construction of a diamond processing industrial park, fill the gaps in diamond cutting, grinding, and processing, extend the cultivation of the diamond industry chain, and obtain a certain degree of initiative in the middle processing link, achieving a leap from cultivating a diamond producing country to cultivating a strong diamond industry.