Lab Grown Diamonds set to lose 4Cs certification; will buyers really bother?
Would you buy a diamond if it did not have the 4Cs certification? The natural diamond industry, crumbling under the onslaught of technology-driven Lab Grown Diamonds (LGDs), is certainly hoping you wouldn't.In a desperate bid to deter consumers from buying tech-driven diamonds, which have flooded the market at a third of the price of natural diamonds, the Gemological Institute of America, one of the world's leading diamond grading agencies, has announced it will no longer use its internationally recognised 4Cs grading system for laboratory-grown diamonds.advertisementInstead, beginning later this year, lab-grown diamonds submitted to the GIA will receive simplified descriptors—categorised broadly as either 'premium' or 'standard', or no grade at all if the quality is subpar.The value of diamonds is decided on the basis of the 4 Cs—colour, clarity, cut and carat weight. There are several grading agencies the world over, of which the GIA, International Gemological Institute (IGI) and Hoge Raad voor Diamant (HRD) are the most respected. The latter two particularly hold weight in Europe and Asia while the GIA has global acceptance.
The decision to discontinue the grading for LGDs is meant to emphasise their difference from natural diamonds. Henry Smith, head of sales at the Institute of Diamonds, a part of the De Beers Group, said the GIA's move is more than a simple nomenclature change. 'The GIA's adoption of a distinct grading framework for LGDs is a significant advancement in safeguarding the gemological integrity of the diamond industry. Natural diamonds are rare geological treasures formed under immense heat and pressure over billions of years. Applying the same 4Cs grading system to lab-grown synthetics, which are produced in a matter of weeks in controlled environments, can lead to misinterpretation of value and rarity. The GIA's move supports a more accurate and transparent classification system that aligns with the scientific and commercial realities of the two products,' explained Smith.advertisementOver the past two years, the global natural diamond market has seen an unprecedented 30 per cent correction in prices, driven by slowdown in sales, partially due to Covid-triggered economic slump. There is a glut of inventory while the demand is sluggish as new and low to medium-end buyers are shifting to LGDs.The natural diamond industry has been flummoxed about how to respond to this disruptor technology, which is threatening to uproot the centuries-old, billion dollars' worth of diamond mining, trading, polishing and uber premium jewellery sales industry. As a consequence, major diamond polishers and exporters in the Surat hub have reduced by more than half the wages and work hours of hundreds of thousands of artisans. This has created a socio-economic humanitarian crisis in Surat, where nine of every 10 diamonds sold the world over are polished.Kirit Bhansali, chairman of the Gem and Jewellery Export Promotion Council (GJEPC), India's apex jewellery trade body, said the GIA's decision to use descriptive terms instead of the 4Cs grading for LGDs is an important evolution in diamond classification. 'This will help eliminate confusion by clearly distinguishing how lab-grown diamonds are assessed, separate from the standards developed for natural diamonds. For India, as a leading hub for both natural and lab-grown diamonds, this change brings much-needed clarity and balance to the marketplace—allowing both categories to grow with greater transparency, integrity and consumer confidence,' he said.advertisementLGD producers in India are disappointed but not particularly perturbed by the GIA's decision. 'We will approach other grading agencies—for instance, IGI—to certify our product and take our business there. For the domestic market, Indian grading agencies such as the Gemological Institute of India (GII) will gain traction,' said Shashikant Shah, chairman of the LGD Council of India. He added that this move exposes the panic seeping into the natural diamond industry as they are desperate to reverse the global slide in prices of natural diamonds and clear their inventory worth hundreds of crores of rupees.Subscribe to India Today MagazineTrending Reel
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