Key Takeaways
- Lab-grown diamond prices have crashed up to 96% since 2018 due to oversupply
- Natural diamonds are regaining consumer preference but face ESG challenges
- India’s diamond industry faces mixed impacts with export challenges but domestic growth
Natural diamonds are making a comeback as lab-grown alternatives face a dramatic market collapse. Prices for synthetic diamonds have plummeted by up to 96% since 2018, with consumers shifting back to natural stones amid eroding confidence in lab-grown gems.
World Diamond Council President Feriel Zerouki confirmed the trend, stating: “If you look at the latest trends, lab-grown diamond prices are crashing. This is impacting consumer confidence in lab-growns.”
Industry analyst Paul Zimnisky noted lab-grown diamonds now sell at a 90% discount to natural diamonds – a stark contrast to 2015 when they were only 10% cheaper.
India’s Diamond Industry Impact
The shift brings both opportunities and challenges for India, which polishes over 90% of the world’s diamonds. While synthetic diamond exports surged 50% by volume in 2024, their value dropped 45%, creating financial strain.
Surat’s synthetic diamond units face significant workforce issues, with reports suggesting nearly 4 lakh employees experiencing payment delays or layoffs since June.
Natural Diamond Challenges
Despite lab-grown’s decline, natural diamonds face their own hurdles. A McKinsey study highlights growing ethical concerns about mined diamonds, particularly among younger consumers who prioritize ESG compliance.
Global natural diamond production is expected to dip from 129 million carats in 2024 to 125 million in 2025. Mine depletion and sanctions on Russia’s Alrosa have constrained supply, while mining companies have reduced investments in new projects.
Trade and Domestic Growth
India’s diamond exports face headwinds from US tariffs exceeding 50%, potentially causing 28-30% revenue drops. However, domestic demand provides a silver lining, growing 20% annually since 2022 and projected to reach $4 billion by 2030.
With trade negotiations reopening between India and the US, there’s potential for tariff relief, offering hope for the world’s largest diamond polishing industry.
