Surat Lab Grown Sector Calls for End to Heavy Discounts

(IDEX Online) - India's lab grown diamond sector is calling for an end to heavy discounting, as manufacturers struggle with shrinking margins.

Industry leaders urged traders and brokers not to sell below agreed prices and to avoid undercutting, at a meeting of the Surat Lab Grown Diamond Association on September 7.

The Surat-based news outlet Loktej reported that polished lab grown diamond prices had recently risen by 20% to 25%, prompting traders to reduce the discount they were offering buyers from about 7% to between 3% and 4%.

"The discount practice is eating out our earnings and it should stop. With unity in the industry, we can prevent it," Babu Vaghani, president of the Surat Lab Grown Diamond Association, said, according to the Times of India.

Vaghani also warned that falling lab grown diamond prices were putting further pressure on manufacturers' profits and wages.

"As the price of LGD drops, the profit also drops for manufacturer and this forces to cut down wages further. We need to change this situation by stabilising prices," he said.

The effect creates a difficult equation for the industry. Lower prices can make lab grown diamonds more attractive to consumers, but aggressive discounting can leave less money in the supply chain to pay manufacturers, polishers and workers.

Persistent price erosion over the years had prompted some polishing units to consider moving into other sectors, while skilled workers were leaving as wages came under pressure.