BDB bans synthetic diamonds: Pros and cons of this decision on India and world

Of course, BDB was not the first to take this banning decision and, in fact, Israel had done so last year
Natural diamond
Natural diamond

Bharat Diamond Bourse (BDB) has banned the trading of synthetic diamonds on its floor after a general body meeting decided with a majority to do the same and now strict action will be taken by the body against those flouting this rule. As BDB president Anoop Mehta says, “A circular has been issued to all the members operating in the bourse. A strict vigil will be kept to ensure that no synthetic diamond enters the bourse from now.”

Of course, BDB was not the first to take this banning decision and, in fact, Israel had done so last year itself. But the question remains why banning synthetics and how this decision is going to affect the business in India and the world?

Let us begin with the basic difference between the two types of diamonds-synthetic and natural.

Synthetic diamonds are those which are made by man in a laboratory as opposed to natural diamonds, which are result of thousands of years under the earth. So, the most obvious difference between natural diamonds and synthetic diamonds (also called simulated diamonds or diamond enhancements) is that real diamonds form naturally inside the earth. Synthetic diamonds are created in a laboratory or factory and are manufactured rather than mined.

As far as India is concerned, this banning by BDB is certainly going to help as our main production and revenue come from natural diamonds rather than synthetic, and there is also a question of credibility. As the Regional Chairman, Gems and Jewellery Export Promotion Council (GJEPC), Dinesh Navadia says, "Diamonds worth over $23 billion are traded in the bourse per annum. We want to build a clean image of the diamond industry and this is the beginning."

Moreover, India is also going to benefit from the ban as world renowned mining companies like De Beers, Rio Tinto, Alrosa , etc, are planning to start their operations in India by the end of October. This banning is going to help in ensuring clean trade at the Bharat Diamond Bourse.

Similar views were echoed by Sabyasachi Ray, Executive Director at The Gem & Jewellery Export Promotion Council , "It is good that the BDB has taken the initiative to ban the synthetic diamond trade. The trade is okay with the fact that the synthetic diamonds are sold with full disclosure. It is a criminal act when someone indulges in undisclosed mixing of synthetic diamonds with natural diamond parcels."

As far as banning of BDB of synthetic diamonds to have effect on the world trade is concerned, this should not affect much. In fact, due to synthetic diamonds being cheaper than natural diamonds, it’s already popular in the west. Moreover, most of the laboratories are concentrated outside India, and hence, ban is not going to have much effect on the future of artificial diamonds.

As much was echoed by Ernie Blom, World Federation of Diamond Bourses (WFDB) President, when he said that BDB was within its rights to ban, but clarifying at the same time that he was not supporting the ban on synthetic diamonds.

To quote Blom, “Each of our member bourses, of course, has full decision-making power regarding which types of diamonds can be bought and sold within their premises as long as the decisions are made in line with the WFDB’s regulations. I would reiterate that we are not opposed to trading in synthetic/laboratory-created diamonds and accept that there could be a market for them. We only insist that such stones are fully disclosed so that the trade and consumers know exactly what they are being offered. This is critical in ensuring consumer confidence.”

“As the Bharat Diamond Bourse said in its media statement following the vote in favour of banning synthetic/laboratory-grown diamonds, its decision aims to ensure the growth of the natural diamond trade, strengthen consumer confidence and reassure faith and trust in diamonds. T


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