If you look at any standard book on diamonds, it will tell you that 80% of the world's diamonds are industrial quality and only 20% gem quality.
And it hasn't been true for at least 30 years.
Around 1970, De Beers, which then controlled 80% of the world's diamonds, decided to convert as much as possible of its huge industrial stockpile to jewelry stones. By doing so, the company stood to make windfall profits and also to prepare for the coming globalization of the diamond market. Keep in mind that at this time, annual production was around 30 million carats. And De Beers was already creating an ex nihilo engagement market for diamonds in Japan.
By 1976, diamonds that had once served as drill bits were now being used for smaller, lower-quality cocktail and engagement rings—at ten times their old value. And the old ratio of 80% industrial to 20% jewelry had been completely reversed.
How did De Beers accomplish this amazing feat? By encouraging the rapid development of a cutting industry in India where low wages made it profitable to produce cheap, mostly very small labor-intensive stones.
Now, when annual world production of diamonds is four times what it was 30 years ago, and voracious markets have opened up throughout Asia, India is cutting most of the world's diamond in volume if not value. And at least 50 out of the 80 or so privileged diamond dealers called sightholders who buy every five weeks from De Beers are Indian. Indians don't just dominate the cutting markets in India, but also Belgium and America. "We all work for Bombay now, even De Beers," a New York cutter says.