Diamonds, long considered a symbol of wealth, beauty, and luxury, are now experiencing a transformation. The rising trend of lab-grown diamonds is reshaping the traditional mining market. These artificially created diamonds are not only affordable but also have a lower environmental impact.
In a country like India, where the diamond industry plays a crucial role in the economy, this shift brings both new opportunities and challenges. But does the growing popularity of lab-grown diamonds threaten the traditional mined diamond market? Let’s take a closer look.
What’s Happening?
The market for lab-grown diamonds has expanded significantly in recent years, making them increasingly popular among consumers. In December alone, India’s imports of lab-grown diamonds (LGDs) surged by 50%, while exports rose by 26% — a clear indicator of market growth and increased stock levels. India is also a global leader in the LGD industry, accounting for 29% of global exports. Along with China, India produces nearly 80% of the world’s lab-grown diamonds.
Back in 2015, LGDs had a market share of just 1%. By 2024, this has surged to 20%. According to The Knot, 52% of centre stones in 2024 were lab-grown, compared to just 12% in 2019.
Impact of LGDs on India’s Jewellery Market
The rise of lab-grown diamonds could reshape India’s traditional jewelry industry. As more consumers opt for LGDs due to their affordability, demand for natural diamonds and traditional gold jewellery may decline.
Additionally, consumer buying patterns are evolving. Many are now shifting towards LGDs and financial gold products such as Gold ETFs and Sovereign Gold Bonds. This trend is expected to intensify in the coming years, redefining the market dynamics.
Lab-Grown Diamonds: A New Trend
China, the second-largest diamond market after the US, is showing signs of recovery. This is a positive signal for India’s diamond industry, which plays a key role in global diamond manufacturing.
According to The Economic Times, a report by Kotak Equities highlights that India’s gold jewellery market is also feeling the impact of LGDs. Compared to traditional gold jewellery, lab-grown diamond jewellery is affordable and offers greater design flexibility. Additionally, these diamonds are 40-50% cheaper than mined diamonds.
What’s in It for Investors?
The International Gemological Institute (IGI) is the world’s second-largest diamond certification body, holding a 33% share of the global market. It dominates the LGD certification segment with a 65% market share and holds a 42% share in studded jewellery certification. In India, IGI has an even stronger presence, commanding 50% of the market, further solidifying India’s status as a hub for diamond cutting and polishing.
Additionally, according to the Gem & Jewellery Export Promotion Council (GJEPC), rising demand in markets like China could benefit Indian exporters. However, Kotak Equities warns that this could impact gold jewellery sales, making it crucial for investors to monitor evolving market trends.
What’s Next?
A report by Morgan Stanley projects that the global diamond certification market will grow from $600 million in 2028 to $1 billion. This growth will be primarily driven by a 25% increase in lab-grown diamond certification.
The future of India’s jewellery market now depends on how quickly LGDs gain acceptance among consumers. Over the coming years, the prices of natural diamonds may continue to decline, further shifting the industry landscape.
Overall, lab-grown diamonds are not just revolutionising consumer choices but also opening new avenues for investors and reshaping the diamond industry as a whole.
*This article is for informational purposes only. This is not investment advice.
*Disclaimer: Teji Mandi Disclaimer
