Inside the two diamond markets driving the divide in India’s jewellery sector

The global jewellery market is steadily expanding, with Deloitte’s Sparkling Success report placing its size at US$353 billion in 2023 and projecting it to reach about US$482 billion by 2030, an addition of more than US$100 billion in seven years. India’s jewellery sector, valued at US$80–85 billion in FY24, is on a similar upward track, with estimates suggesting it could more than double to US$225–245 billion by FY35.

Natural diamonds are now anchored to a tightening supply base. Boston Consulting Group (BCG) and De Beers, one of the world’s largest diamond companies, warn that primary supply is projected to shrink by about 1% CAGR over the next decade. Annual global production is expected to fall to 110–120 million carats by 2033 — a significant drop from the industry peak of 160 million carats in 2006.

Lab-grown diamonds, meanwhile, have surged on the back of manufacturing scale. Their supply has grown over 10x between 2018 and 2024, while wholesale prices have declined by over 90% during the same period - from a high of $3,000 per carat to nearing the marginal cost of production (around $150 per carat).

Both categories are growing. But they are not growing in the same way.

The Consumer Intent

Indian buyers tend to associate natural diamonds with meaning, status and long-term value. BCG’s desirability rankings indicate that natural diamonds remain the most preferred in India, supported by the fact that historically more than 85% of polished wholesale demand has been for high-clarity stones.

Trust also plays a role in purchasing decisions. Deloitte’s consumer survey shows that brand heritage, brand values and long-standing relationships with jewellers are among the strongest drivers of preference, with over 75% of respondents placing these factors in their top three reasons for choosing a brand.

Younger consumers are contributing to growing interest in contemporary designs and alternatives such as lab-grown diamonds. Their motivations lean toward self-purchase, everyday wear and modern styling. With lab-grown diamonds typically priced lower than natural diamonds, the category presents a lower entry barrier and is viewed as easier to experiment with.

Why Natural Diamonds Still Anchor Milestones

Across generations, the emotional and financial rationale for natural diamonds remains strong. Their supply is inherently constrained. Future production increases are unlikely to offset decreasing volumes from mines reaching the end of their productive life. Mine exploration budgets have fallen to 20% of 2007 levels, and the pipeline for new discoveries is thin.

This scarcity feeds into long-term value perception. It also explains why natural diamonds continue to anchor weddings, anniversaries, and intergenerational gifting. The stones carry both cultural memory and investment weight. The demand outlook reflects this durability. Natural diamond polished wholesale value is projected to increase at a CAGR of 2% to 4% from 2023 to 2033.

The True Cost of Access and Aesthetics

Lab-grown diamonds have built momentum on affordability, aesthetics and sustainability cues. Deloitte notes they are gaining popularity among consumers, especially those who prioritise sustainable and ethically sourced materials.

While the perception remains that Lab-Grown diamonds have a low, neutral or even negative carbon footprint, the facts tell a different story. Irrespective of the manufacturing process used, he process lasts several days/weeks and is energy-intensive, requiring enormous pressure and temperatures above 2,000 degrees Fahrenheit. That’s equivalent to 20% of the temperature of the Sun’s surface.

At the current stage of technology, it isn’t feasible to heat laboratory-grown diamond reactors solely with renewable energy sources other than hydropower. And while some facilities have indeed achieved this, it is far from the norm. Moreover, it must be noted that over 70% of the world’s lab-grown diamonds are mass produced in India and China, which derive a majority of their power from coal.

Sustainability aside, however, the sharply lower production costs and scaled cultivation of lab-grown diamonds translates to larger stones at accessible price points.This shift has been most visible in fashion-forward categories: rings for everyday wear, self-purchased studs, contemporary designs and gifting. Lab-grown acts as an entry point for younger or budget-conscious consumers. But unlike natural diamonds, lab-grown prices soften as manufacturing expands.

Two Segments, Two Value Systems

Rather than competing in a zero-sum market, natural and lab-grown diamonds are diverging into clear parallel tracks. This isn't a story about competition, but about segmentation.

Natural diamonds retain their place as long-term assets - shaped by rarity, legacy, and milestone symbolism. Lab-grown diamonds continue to evolve as an accessible, design-led, fast-cycle fashion category.

Both are expanding, but for different reasons and different consumers. The sector's real shift is not competition - it is clarity. And in a market as dynamic as India's, the biggest opportunity may lie not in choosing sides, but in understanding that the future of diamonds is no longer either-or. It is both.

Note to readers: The information and images in this article have been provided by the Natural Diamond Council.