SBI is the first Indian lender to frame such a policy and reflects a continued industrial shift in the country which leads the world in cutting and polishing services.
To date, India manufactures approximately 15 per cent of the world’s lab-created diamonds.
Earlier this year, India’s Gem & Jewellery Export Promotion Council (GJEPC) encouraged the government to better promote the lab-grown sector. The GJEPC projected that India could produce more than 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 to Rapaport News, “It will not yet finance the procurement of lab-grown rough. Lending will mainly take place through term loans — credit offered for company expansion and capital equipment with a fixed payback schedule — rather than working-capital loans.”
With Russian rough excluded from much of the international market following the invasion of Ukraine in February, India has been impacted more 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 to cutting and polishing factories.
In order to address this volatility, the Economic Times is reporting many major jewellery houses in India are establishing new factories in Surat to produce lab-created diamonds.
"The man-made diamond lobby is becoming stronger by the day,” a source told the paper.
“Though volumes are still a fraction of natural diamonds, SBI probably thinks it is an emerging business."
Globally, demand has steadily increased in recent years. In 2018, lab-created diamonds represented fewer than 5 per cent of total global diamond jewellery sales.
In 2022, the product is expected to breach 10 per cent and if this pace were to continue, 20 per cent is possible by the end of the decade according to experts such as diamond industry analyst Paul Zimnisky.
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