India’s diamond industry is undergoing a significant transformation, with lab-grown diamonds overtaking natural ones in export volume amid falling prices and declining demand for natural stones, marking a disruptive shift in the world’s second-largest diamond hub.
India’s diamond trade is being reshaped by a sharp shift in demand and pricing, with lab-grown stones overtaking natural diamonds in export volume for the first time in the January-to-May period this year, according to Business Standard. The change marks a striking reversal for a country that has long been one of the world’s biggest centres for cutting and polishing both types of gem.
Business Standard reported that natural diamond exports almost halved from 26.63 million carats in 2022 to 15.81 million carats in 2025, while shipments of synthetic diamonds more than quadrupled over the same period, rising from 3.57 million carats to 14.95 million carats. The trend reflects a broader cooling in the natural diamond business, which has been under pressure from weaker overseas demand and softer prices.
That price erosion has affected both segments. According to Business Standard, the average export value of natural diamonds fell from $865.50 per carat in 2022 to $757.91 per carat in the first five months of 2026, while the average price of lab-grown diamonds dropped far more steeply, from $388.77 per carat to $71.13 per carat over the same period. Separately, The Times of India has reported that certified polished diamond prices have also fallen sharply in the domestic market, helping lift sales at some stores.
The downturn comes after several difficult years for India’s polished diamond industry. Business Standard and other trade reports have said cut and polished diamond exports fell 27.5% in 2023/24 to $15.97 billion as demand weakened in the US, China and the United Arab Emirates. ICRA has also projected that lab-grown diamonds could account for 10% of India’s total polished exports within three years, while retailers are increasing investment in both natural and lab-grown stones to cater to younger buyers seeking lighter, more affordable jewellery.
Disclaimer: This article is intended to inform and educate, not to recommend or endorse any financial product, investment or strategy. Please consider your own financial circumstances and seek professional advice where appropriate before making financial decisions.
