September 2022 | Lab Grown Magazine

September 2022 | The Lab Grown Diamond Resource Book 20 To advertise call (888) 832-1109 | September 2022 21 n unexpected LGD victory seems to be shining on, and from India, of late. That’s the public relations goal from India’s largest bank, and the country at large. The LGD business-to-business (B2B) campaign has various elements, the latest announced in August, yet the total transparency factor has some cloudy and confusing facets. Some may debate if we’re in a global recession, yet no one will question the steady fall of the Indian rupee. When compared to the U.S. dollar, the rupee has shrunk since January of this year. That’s why many seemed surprised when the State Bank of India (SBI) announced a new lending policy specifically directed to the man-made diamond business sector in India. SBI is the first Indian lender to frame a new fund directed exclusively to local LGD makers. And, they are doing so in a market temperament where high-street banks still harbor LGD suspicions, and traditional diamantaires continue to softly scoff LGD firms. Manufacturing Funds SBI is targeting their LGD funding arm to Indian jewelers who have, or are planning to launch LGD factories. Many of these targets are eyeing territorial production areas that are not in India’s best interest, however. Lending large amounts of money to local LGD producers comes with a caveat: Those businesses must be kept local. When speaking directly to the specifics of future LGD loans, an SBI source noted, “It would be largely term loans for machinery import.” “SBI was evaluating the volatility in price of man-made stones before making a foray into the business,” a senior official of the private sector bank said. To start, SBI’s Diamond Bourse branch in Mumbai, and their commercial branch in Surat have been identified as immediate “business alliances.” Yet it appears little funds would be disbursed as working capital. This is confusing to some Indian businesses applying for this newfound loan opportunity. Also, borrower’s exposure to foreign currency must be fully hedged. Frankly, SBI’s news appears to be inappropriate when aimed at the multiple, iconic, natural diamond brands - each known to be discussing a possible relocation from Mumbi, their long-time hub. Each, if realized, could create a devastating hard hit to India’s bottom line, and one heck of a bad optical look to the diamond world at large. India’s LGD Investment Optics Nirmala Sitharaman, India’s Finance Minister, announced an increase in the basic customs duty on the import of cut and polished man-made diamonds from 7.5% to 15% earlier this year. India’s LGD cut and polished stones are attracting buyers from Germany, Italy and Australia since global economic uncertainty has made natural diamonds less affordable for a significant number of global consumers. FromAugust 5-8 of this year, the Lab-grown Diamond and Jewellery Promotion Council (LGDJPC) held its second annual buyers’ event with over 100 exhibitors. Buyers were mostly from the Middle East, Singapore, Hong Kong and London. The value of cut and polished diamonds exported from India between 2009 to 2021, with estimated projections through Q4 of 2022, has grown the highest since FY 2012 at $24.24 billion based on analyses and forecasting by Statista. The New Diamond Luxury When one thinks of luxe diamond brands, icons such as Cartier, Tiffany and Winston come to mind - all of which are still standing strong against LGD under their current brand sake. Yet, driving change is upon us, and, for LGDs, luxury is in the passenger front seat. LVMH Luxury Ventures, along with other investors, India’s largest bank is the first of its kind to offer loans to local LGD producers, but be sure to read the fine print if you are eligible to apply. Image: SBI India’s Finance Minister, Nirmala Sitharaman, stands among finance cohorts while confidentially holding a newly signed LGD funding framework made possible through a strategic alliance with SBI. Photo: GJEPC