Export of natural diamonds may see turnaround as China reignites demand

Indian diamond exporters are hopeful of a rebound in Chinese demand after three years of decline as top jewellery retailers in China have rolled out a buyback programme to rekindle interest in natural diamonds.

Retailers like Chow Tai Fook, Lao Feng Xiang, Chow Sang Sang, Luk Fook, Chow Tai Seng, and Qeelin introduced the buyback offer last month, leading to a spike in queries.

"The buyback scheme has created positive sentiment among the Chinese diamond buyers and queries have gradually started coming in," said Sabyasachi Ray, executive director of Gem & Jewellery Export Promotion Council (GJEPC).


Indian cut and polished diamond exports to China have halved in the last three years to $3.28 billion in 2024-25 from $6.55 billion in 2021-22 as consumers there moved away from diamond to gold as a safe haven. China is the second largest consumer of diamonds from India after the US.

Indian trade executives expect renewed diamond sale in China from September as June to August are traditionally dull months.

"Now that the buyback scheme has been introduced for diamonds like gold, we expect diamond demand from China will pick up from September onwards," said Colin Shah, managing director of Kama Jewellery, a leading diamond jewellery manufacturer and exporter.

China has been facing economic challenges with poor consumer spending since the Covid-19 pandemic. "China's economy is facing significant headwinds, including a real estate slump, slow consumer spending, and the ongoing impact of trade tensions with the US," Shah said. "All these have impacted natural diamond consumption in the country."

Increasing popularity of lab-grown diamonds - which are significantly cheaper than natural diamonds - among young Chinese consumers has also dented the demand for natural diamonds, trade insiders said.