A little education to start with. At a high level Diamonds are graded and priced based on 4 characters - Color, Clarity, Cut and Carat weight.
Color is graded on a scale of characters starting from D being colorless.
Clarity refers to inclusions of elements other than carbon in the naturally forming diamonds. These inclusions appear as spots, lines or cloudy formations in other wise a clear piece of diamond.
Cut is the shape, proportions and angles of the various dimensions of the diamond. This is what determines how bright the diamond shines.
Beyond this many other factors like griddle thickness, luster, polish, brilliance, origin and fluorescence come into play when pricing diamonds. Not all of these might matter for all diamonds. For example, fluorescence is desired in lower color diamonds while it is not desired in colorless diamonds.
Among South Indians, especially Telugu and Tamil communities a very high emphasis is placed on the clarity of diamonds and most consumers ask for VVS clarity. When it comes to color its E or F.
The price of the diamonds drops 5 to 10% with a drop of a grade in color or clarity. Meaning the price difference between an E/VVS diamond and F/VS would be 10 to 20%. The price change for a lower quality cut is also similar.
There is a whole new market of artificial or lab grown diamonds evolving. Artificial diamonds have been around for over 50 years. The older technology of making diamonds was called HTHP, the quality of the diamonds made this way has been in general lower and the cost of production higher which limited the consumption of these diamonds to industrial use only.
A newer technology called CVD (chemical vapor deposition) evolved over the last decade which produced higher quality diamonds at a lower price. The cost of CVD diamonds is less than half of the cost of natural diamonds. The challenge with CVD diamonds is that they are almost indistinguishable from natural diamonds and can only be detected with very expensive equipment.
Diamonds are commodity, their price is determined by supply and demand like any other commodity. Loose diamonds are traded in diamond exchanges around the world. Wholesale diamond pricing is indexed based on color, clarity, cut and carat size and is available for traders on trading platforms like RAPNET.
The current price for one carat of diamonds smaller than .01 cents with excellent cut, D, E, F color and clarity of IF (internally Flawless), VVS (Very Very Small Inclusions) is Rs. 52000. Add the cost of import duties, the cost is now 55000 per carat.
There are many jewelers that are advertising and selling diamond jewelry with prices of Rs. 48000 a carat or lower. Achieving such a price is only possible by selling jewelry at loss or by manipulation of facts.
It is very common in the Indian Jewelry trade to do one of the following:
- Use lower grade diamonds and claim that they are of higher grade – for ex – actual diamonds used are GH/VS but are sold as EF/VVS
- Manipulate the weight of diamonds in an ornament – for ex – actual weight of diamonds in the ornament is 8 carats, claim it as 10 carats
- Use CVD diamonds and claim as natural diamonds.
Many consumers are fooled by the certificates that are provided by the jewelers, always insist on a certificate from a third part and not the jeweler. Even a certificate from a third party is not 100% reliable. If you read the fine print on the certificate, it will say that the ornament contains so many carats of diamonds based on information provided by the jeweler.
The certificate if from a reputed certifying organization at best is only certifying the color and clarity of the diamonds used in the ornament. Not the weight of the diamonds.
All certificates are not the same. There are over 30 companies that certify jewelry in India, only one or two of them are worth the cost of the card they are printed on.
As a consumer do not be deceived by the low price per carat being advertised by these unscrupulous jewelers. Buy only from reputable jewelers who could be held accountable. At this time, Jewelers with operations in USA are the only ones that are accountable as they can be taken to court.
No legal remedy is available against a jeweler coming from India as there is no legal entity or person that can be sued in the US and a transaction done in US has no jurisdiction in India and cannot be taken up in an Indian court.
Many branded/chain Indian jewelry companies have been taken to court on many occasions with no results of any consequence.
As an example, recently a popular jeweler’s store, who gives away cars to customers as raffle prizes and has a major Telugu hero as the brand ambassador was raided in Kuwait and was found to grossly manipulating weights and even had copper wire embedded inside ornaments to grossly increase the weight of the ornament.
A few jewelers in the US are planning on setting up a Jewelry appraisal and CDV diamond screening service where a consumer can send in their jewelry to be primarily screened for artificial diamonds.
The service would also verify the weight of the diamonds, but that would require disassembly of the ornament and would be expensive. Should this service be provided consumers will at least have an option to have their jewelry checked and appraised.
The best option for a consumer is to buy from US businesses who can be held accountable.