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Shashikant D Shah: “Mined diamonds and LGDs are separate categories”

22 march 2021

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Armed with a commerce degree, Shashikant D Shah entered the diamond trade by opening a diamond Jewellery Showroom exclusively for Nakshatra and Asmi brands in 2003 and has not looked back since.

DM Gems came into being in 2003 with Shashikant as Founder/Owner, and the very next year the company was appointed as Distributor for Gemesis Cultured Diamonds (Gemesis Corp.) and entered the world of lab-grown diamonds (LGD).

Today, as the Chairman of Lab Grown Diamond & Jewelry Promotion Council (LGDJPC), Shashikant Shah has been spreading awareness of lab-grown diamonds and helping and educating traders in the sector.

In an exclusive Interview with Rough&Polished, Shashikant Shah gives a clear picture of the LGD sector in India, their operations, processing methods and so on.

Some excerpts:

What’s the reason for establishing India’s Lab-Grown Diamond and Jewellery Promotion Council now, when lab-grown diamonds have been around since 2004? What is the Council’s agenda, planned activities, aim and plans for the future?

Indeed, that was the year 2007, when the Gemological Institute of India (GII) & Gem & Jewellery Export Promotion Council - GJEPC India held the Seminar in Mumbai by inviting two key LGD manufacturers from the USA, 1: Apollo Diamond& 2: Gemesis Diamond to share their view on LGDs are a threat or friend of the mined diamond industry.

Both of the company replied to all those questions which were asked by diamantaires and added that the big table of LGD diamonds can create a great fashion avenue which is often hardly possible in mined diamonds.

With that positive note, I was convinced about LGDs... yet that takes time when India was sparkling a great with mined diamond exports, especially during 2004 & up to 2007.

As of today, the Council has a well-organised body. We are well convinced about the LGDs trade & industry to be a great fashion and luxury market statement. The major factor is to set a fashion trend from time to time and to introduce a great revolution in the pattern of wearing jewellery because there is huge scope to introduce a range of wearable gadgets in jewellery!

We received an overwhelming response for the testing ground by organizing the 1st ever LGD Expo 2019, now it is in the public domain! Upon resumption, we are ready, sooner the board will meet to charter agenda and activities further. No doubt, LGD players are looking for the announcement of another LGD Expo.

Tell us about the entrepreneurial efforts in India to grow lab grown diamonds. Approximately how many units exist currently, and what quality and size of goods are produced?

Just a two-year ago about there were about 50 players in LGD manufacturing yet, in the wake of pandemic Covid-19, this LGD manufacturing activity has grown significantly. The key entrepreneurial idea was to 1: keep up commerce & economy, 2: mined diamond activities had been halted virtually 100% and the number of entrepreneurs has to keep their skilled artisans working that enable them to manage their economy.

Economy and preserving skilled artisans led several mined diamond manufacturers to adopt LGD manufacturing. This critical entrepreneurial quality serves the purpose and many skilled artisans survived during the lockdown.

As of today, it is estimated over 2K units are manufacturing LGDs, during 2019-2020, LGDs demand has grown and accordingly, over 94% of the total manufactured LGDs are exported from India. No doubt, every manufacturer managing their different sizes yet in general well demanded size is around 2.70mm & up to 3.20mm of EF and GH in colour.

Please elaborate on the Indian LGD cut and polished sector? Given that many natural diamond manufacturers have also diversified into LGDs, are there separate manufacturing units or the existing natural diamond units used for manufacturing both?

De facto, natural diamond C/P centres remained far from LGDs because, initially big trade bodies & associations were not acknowledging the LGDs because commerce without morality was adopted by few, and because of undisclosed mixing mined diamond c&p units distanced from LGDs.

On the other hand, small units remained reliant on big barons for mined rough to run their units. Often scenario of lay-off was faced. Now, the lockdown forced them to think of an alternative, and they initiated with LGDs too. Few new units are known to C/P only LGDs.

When units of mined diamonds C/P resolved to adopt LGDs, they were well aware in ‘mixing issues’. As of today, they follow strict guideline and manage crystal-clear processing because even BDB like big trade bodies have permitted only following their strict norms for trading. Therefore, enough care is being taken right at the beginning of the process. Those, who are processing both, have a clear section & department. Many have separate units for LGDs.

Now that the market has embraced LGDs, what steps is the Council taking to create awareness and acceptance of the LGDs, sustainability standards etc, as exports of both rough and polished LGDs will soon be the norm?

The Council was encouraged when US-FTC had pronounced their view. As of today, not only the Council but also our LGD players are at the confidence on the back of the announcements of GJEPC & BDB for the trading of LGDs. Accordingly, the Council is planning to promote the category for fashion & luxury. The proposed board meeting will also focus on a buyer-centric seminar & campaign by keeping millennials & up to GenZ in the mind.

Sustainability is not an issue for the LGDs because Lab Grown Diamond &Jewellery Promotion Council (LGDJPC) is insisting upon, 1: transparency, 2: standard business practices & 3: green trade. All those three norms are well accepted throughout the pipeline. And while you are asking, as exports of both rough and polished LGDs will soon be the norm? Indeed, India is practising! Even since unlock 1 this has been done because of total clarity. As you know the LGDs have their own HS Code 7104 90 10, so this clear code has opened up immense horizon and scope!

How many members have joined the Council till today? What are the requirements for membership? Will the members include the whole pipeline from growers to retailers?

Truly speaking, we have not undertaken any membership drive so far! Yet, as of today, LGDJPC represents about 35K members globally. The membership of the council represents the interests of over 35K LGD fraternity & end-users, about 5000 Exhibitors, over 100 allied service providers to LGD trade-n-industry across the globe!

This represents the entire spectrum of LGD that includes widely, growers, manufacturers, retailers, wholesalers, allied product-n-services, gold, silver, platinum, other metals for fashion jewellery, related machinery, tech-n-tools for LGD & jewellery! That is, membership is open to all those who are a part of an LGD value chain or LGD pipeline!

With these wider criteria, any LGD player can be a member by adopting the LGDJPC memorandum.

As Chairman of Council, what will be the primary issue that you will be addressing? With diamond exchanges in China, Dubai and even BDB intending to begin trading in LGDs, will your promotional activities for LGDs pick up impetus too? What’s the plan?

De facto there is no issue, on the contrary, they have acknowledged and accredited LGDs are the demand of hour! And not only the BDB but also numbers of WFDB members have accepted LGD trading in their premises.

Already we are well convinced about the immense scope of LGDs, it’s a massive fashion boulevard where the sky is the limit!

Before a pandemic, it was proposed to organise the LGD Expo in Delhi. Accordingly, we are testing the ground again. Looking at the government obligations & rule, testing feasibility if we can organise successfully!

So, is everything clear regarding FTC’s guidelines OR are there more parameters to sort out for smooth running of both the sectors?

Not only the FTC guideline but also the separate HS Code have resolved and ease LGDs. And even before the mined diamond players had no issues with LGDs. Their real oppose was for ill practice, commerce without morality, undisclosed mixing. In the row, WFDB has clear rules for their members & BDB guidelines are enough for traders!

With LGDs are preferred by millennials, especially Gen Z globally, where do you see the future of LGDs going forward? Can we visualize a future scenario where the LGDs as well as natural diamonds enjoy distinct markets, clearly demarcated for the benefit of the end consumers? Your thoughts?

Mined diamonds and LGDs are separate categories. Even the buyer class (end consumer) is also well categorized. Mined diamonds are from mother earth and even in the long run that preserves the value, while our LGDs are a fashion category. So, first of all, there is to understand that both have their buyer class and it is quite clear. Those who believe in mined diamond will prefer that only.

While LGDs are all about fashion and luxury, where buyer satisfaction is most and buyer least concern about any re-sale value of LGDs. This is the category for statement, style, updated trendy panache! This is the category that remains relevant to the ongoing trend and fashion, couture taste & preference! Fashion is all about to manage and match the Pantone Colour of the year. Functional jewellery is an open space for LGDs to fascinate millennials & up to GenZ because the GeNext is gadget-savvy, techno-savvy and these can accommodate in the LGD category not in mined diamond jewellery category or even in the gold or platinum metal jewellery categories.

Aruna Gaitonde, Editor in Chief of the Asian Bureau, Rough&Polished