RESOURCES

The Global CVD Rough Supply Chain in 2026: Two Rough Chains, Not One

In FY2025-26 India's lab-grown diamond exports overtook natural stones by volume for the first time (18.84m vs 16.00m carats) — yet contributed under 10% of diamond export value. Volume leadership is not value leadership. Drawing on GJEPC quarterly data, IDEX industry figures and wholesale price indices, this piece dissects the one-directional 'grown in China, cut in India' chain: its real structure, its price cycle, its policy exposure, and why large-format rough is the one battlefield the price war has not yet flattened.

CVD Rough Supply Chain2026-07 · 10 min

01The Conclusion First: A One-Directional Chain That Just Crossed Its Threshold

The global lab-grown diamond industry has hardened into a clear one-directional division of labour: China grows the crystals and builds the reactors; India cuts, polishes and exports. This is not an impression but an arithmetic fact. IDEX's May 2026 industry analysis cites figures putting China at roughly 63% of global lab-grown production — overwhelmingly small HPHT stones — against India's ~15%, weighted toward larger CVD material. In cutting and polishing, however, India holds a near-monopoly of about 90% versus China's 5%. India therefore owns the final step to the consumer but not the rough or the equipment behind it. The fragile link in this chain is not the polishing wheel in Surat; it is provenance of rough and ownership of growth technology. Our read: as the price war compresses margins on small and mid-size stones toward zero, value migrates to the two ends — large, high-grade gem rough at one end, and industrial single-crystal material that has nothing to do with jewellery logic at the other. The middle business of buying rough, cutting melee and clipping the spread is being reduced to a toll.

02India's Real Numbers: Winning Carats, Not Value

In FY2025-26 (April 2025–March 2026) India exported 18.84 million carats of polished lab-grown diamonds, up almost 31%, against 16.00 million carats of natural polished stones, down almost 4% — the first time lab-grown has led on volume. Value tells the opposite story. Natural polished exports were worth roughly US$12.16 billion at an average of about US$760 per carat; lab-grown averaged about US$60 per carat, a gap of some 12.7×. The April 2026 monthly split is blunter still: lab-grown took 50.4% of exported carats but only 7.4% of diamond export value (US$81.6m against US$1,018.4m for natural). GJEPC's own quarterly reporting points the same way — polished lab-grown exports for H1 FY2025-26 (Apr–Sep 2025) came to US$586.63 million, down 7.99% year on year and just 4.16% of India's total gem and jewellery exports, with September 2025 alone down 10.62% to US$107.64 million. Rising volume, falling price, shrinking value: that is an overcapacity curve, not a demand curve.

03The Surat–Mumbai Cluster: How Thin the Processing Margin Really Is

India's structure repays a closer look. The Bharat Diamond Bourse in Mumbai's BKC has operated since 2010 and describes itself as the world's largest diamond trading centre with members from over 100 nations; it carries trading, customs and financing. Surat carries the cutting capacity. GJEPC is simultaneously the trade body, the statistical authority and the policy negotiator. The number worth computing, though, is a ratio. On GJEPC figures, India imported US$480.37 million of rough lab-grown diamonds (HS 710421) in H1 FY2025-26, up 4.78% from US$458.46 million a year earlier, while exporting US$586.63 million of polished lab-grown in the same window. Rough imports equal roughly 82% of polished export value — leaving under a fifth to cover cutting loss, labour, certification and working capital across the entire midstream. Natural polished exports over the same period were US$6,249.63 million (44.34% of total exports, down 9.57%), with factory utilisation recovering from 50–60% in Q1 to 75–80%. A cluster running higher utilisation on falling unit values with a high rough-to-polished cost ratio has structurally weak bargaining power against its upstream.

04China's Position: Concentrated Capacity, and an Underpriced Policy Risk

China's role needs separating into what is claimed and what is verifiable. China Daily has reported the country at roughly 95% of global lab-grown output; ChinaTalk's October 2025 analysis considers that figure too high, offering instead that China produces 80–90% of the world's HPHT diamonds, that Zhecheng county in Henan turns out around 4 million carats a year — about half of China's output and an estimated 25–40% of global production — and that some 77% of US industrial diamond imports come from China. Equipment is equally concentrated: China dominates HPHT press manufacturing. The structural consequence is one Indian, Middle Eastern and Western buyers routinely underprice: rough and reactors sit in the same jurisdiction. In October 2025, MOFCOM and the General Administration of Customs issued Announcement No. 55 placing export controls on specified grades of synthetic diamond micropowder, single crystals, wire saws and grinding wheels, plus DC-arc plasma CVD (DCPCVD) equipment and process technology. That announcement was suspended from 7 November 2025 until 10 November 2026. ChinaTalk notes the measures targeted industrial-grade synthetics and explicitly excluded jewellery grade. Gem rough is not on the list today — but the list's existence proves the chain is reachable by policy. The case for dual sourcing rests not on today's restrictions but on concentration itself.

05The Price Cycle: After a 96% Decline, the Cost Curve Is the Only Moat

Price is the most honest signal in this chain. Edahn Golan's LGD wholesale price index is down 96% since tracking began in July 2018, with a further 14% fall in Q1 2026 and a 13% year-on-year decline in Q2 2026 — though the rate of decline is slowing. By size the divergence is stark: 1-carat rounds were up 1% year on year, 1.50–1.99 carats down 11%, and 2-carat stones down 20%. The categories that historically carried the fattest wholesale margins fell hardest. Rough tells the same story: the average import value of lab-grown rough into India in 2026 has fallen to roughly US$15 per carat, sourced mainly from China and Dubai, with Chinese HPHT rough feeding the bulk of 1.50-carat-and-under polished goods. Average polished lab-grown export prices are now below US$74 per carat, under 9% of India's diamond export value. For investors the implication is unambiguous: gem-grade lab-grown has migrated from jewellery pricing to materials pricing. In a materials market, narrative earns no premium. Unit cost, single-run yield and batch-to-batch consistency do — which is to say equipment and process, not branding.

06Tariffs and Routing: An Overlooked Fork in the Road

The India–US interim framework announced on 7 February 2026 is widely underpriced in this chain. Under it, natural polished diamonds and coloured gemstones move to zero duty while jewellery stays at 18% — and lab-grown diamonds are explicitly excluded from the relevant annex, continuing to face the 18% reciprocal tariff. The counter-intuitive result: Indian-cut natural stones become cheaper into the US than Indian-cut lab-grown. For Surat, that raises pressure to reallocate capacity between the two categories. For rough suppliers, it tilts demand toward non-US destinations and toward processing or transhipment routes outside the US. Dubai's role grows accordingly: AGBI reported in August 2025 that Dubai traded roughly US$40 billion of diamonds in 2024 and that some US$1.6 billion of lab-grown moved through Dubai in 2023 on DMCC figures, with industry discussion of Dubai extending from pure trading into manufacturing. GJEPC's quarterly reports likewise credit the India–UAE CEPA with supporting export growth. Anyone writing 2026–2027 supply contracts should treat tariff routing as an explicit variable, not background noise.

07Why Large-Format Rough Is the Real Battleground

First, correct a common misreading: the case for large rough is not that big stones hold price better. The data says the opposite — 2-carat polished fell 20% year on year in Q2 2026 against +1% for 1-carat rounds. The real differentiation is physical and process-bound. Yan et al.'s 2002 PNAS paper (DOI 10.1073/pnas.152464799) raised microwave-plasma single-crystal growth from a typical ~1 μm/h to 50–150 μm/h, up to two orders of magnitude above standard processes — and recorded the price honestly: a 5-carat single crystal (7 × 8 × 5 mm) grown over roughly ten times the duration came out brown with a crack on the {111} face. Two decades on, that trade-off remains the industry's central tension. Rate, thickness and area constrain one another; edge field concentration and thermal non-uniformity introduce stress and polycrystalline rims as growth area expands. 'Largest size at equal quality' is therefore a genuine technical watershed, set by chamber design, microwave power density and thermal field control — not by marketing. More importantly, outside jewellery large format is an unavoidable hard requirement: a 45 × 45 mm single-crystal optical window cannot be assembled from small stones. And industrial-grade diamond is precisely the segment policy and geopolitics are contesting — some 77% of US industrial diamond imports come from China.

08The Buyer's Checklist: Six Questions Worth Asking — and Where ENTASK Sits

A checklist for Indian cutting houses, Middle Eastern traders and Western industrial buyers. One: rough provenance and equipment ownership — does the supplier build its own reactors or buy them? Vertical integration sets the credible floor on cost and the credibility of delivery commitments. Two: single-run yield and batch-to-batch consistency, not the best single stone. Three: process stability metrics — chamber pressure, thermal field, continuous fault-free runtime — the leading indicators of yield. Four: certificate samples and Type IIa confirmation. Five: use rough cost as a share of polished export value (roughly 82% industry-wide) as your negotiating benchmark. Six: tariff and transhipment routing. Against that frame, ENTASK's position: founded in Xi'an in September 2020 with registered capital of RMB 20 million, the company is both an MPCVD equipment manufacturer and a diamond material producer (vertically integrated). Its Gen-4.5 and Gen-5 systems currently on sale carry the in-house E-MG010K microwave source (2450 MHz, 10 kW/15 kW): 10 kW gives a 92 mm growth area with 12 mm crystal height, 15 kW a 120 mm growth area. With InsightAction and WiseAction intelligent control, chamber pressure stability is ±0.005 kPa, MTBF exceeds 10,000 hours, full-load continuous operation has run beyond 1,500 hours fault-free, single-run yield is 99% or better, and monthly output per system is 200–300 ct, with a single-furnace record of 856 ct set in January 2026. Rough is predominantly rectangular (90%), in standard 20×15×9.5 / 21×17×9.7 / 24×18×10 mm and non-standard 30×30×15 / 35×35×12 mm — the world's largest at equal quality — in D–E colour, VVS–VS, Type IIa, targeting 10/15/25 ct polished. Optical plates run 20×20 to 45×45 mm at 0.5–1.2 mm custom thickness; heat spreaders are single-crystal only, never polycrystalline, at 1800–2500 W/m·K (supplier-stated range; measurement temperature and method per the accompanying report — note Element Six specifies >1900 W/m·K for single-crystal MCC and >2000 W/m·K for its top polycrystalline grade at 300 K, and values roll off with temperature). The company holds ISO 9001:2015, can supply IGI-certified goods (sample: 10.80 ct D VVS2 Type IIa) (report no. LG756504660), and holds patents CN119269411A (360° stress analyser for transparent crystals) and CN120178750A (industrial communication system for semiconductor equipment), supplying mainland China plus India, the Middle East, Europe and the Americas. Large-format rough is currently oversubscribed, requiring a tenfold capacity expansion. (The ENTASK specifications and performance figures below are supplied by the company and have not been independently verified by a third-party test house; buyers should inspect the raw records on site.)

REFERENCES