India's diamond export pain is hiding a brighter story at home

India's diamond industry is witnessing two sharply contrasting realities.

On one hand, exports of both natural and lab-grown diamonds have declined over the past two financial years and on the other, jewellery retail giants are ramping up investments in both segments to tap rising domestic demand.

The country’s cut and polished diamond exports—its largest diamond export segment—declined to Rs 1.07 lakh crore in FY26 from Rs 1.12 lakh crore in FY25 and Rs 1.32 lakh crore in FY24, data from the Gems and Jewellery Export Promotion Council (GJEPC) showed, even as they continued to account for nearly 44% of the country's gems and jewellery exports.


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Worked lab-grown diamond exports also fell to Rs 10,012 crore from Rs 10,716 crore a year earlier and Rs 11,612 crore in FY24, suggesting that this weakness is not limited to natural diamonds and that slowing global demand, pricing pressures and disruptions in key overseas markets have affected nearly every segment of India's diamond export basket.

According to GJEPC, cut and polished diamond exports were hit by global inventory correction, weaker discretionary spending and tariff-related uncertainty in the US, while polished lab-grown diamonds witnessed price corrections despite higher shipment volumes.

The export slowdown comes despite India's growing strategic role in the global lab-grown diamond industry.

The Asia-Pacific region accounted for nearly 60% of the global synthetic diamond market by revenue in 2025, driven by China's large-scale HPHT (high pressure, high temperature) production and India's export incentives, which attracted around $800 million in investments into the country's lab-grown diamond ecosystem, particularly in Gujarat, according to market research firm Mordor Intelligence.

Domestic market tells a different story

This decline, however, contrasts sharply with the outlook of India's leading jewellery retailers, who continue to invest aggressively in diamond jewellery as consumer preferences shift towards branded, lightweight and design-led products.

Titan launched lab-grown diamond brand beYon in FY26 to target younger consumers and expanded its Diamond Expertise Centres, which help customers differentiate between natural and lab-grown diamonds using in-store verification tools, according to its latest annual report.

The company said jewellery remained its biggest growth engine during the year, adding that it continued investments across brands such as Tanishq, CaratLane, Zoya and Mia while positioning beYon as a new growth avenue in lab-grown diamonds.

Young consumers driving demand

BlueStone believes the biggest opportunity lies not in exports but in India's evolving consumer market.

"The most exciting part is demographic: younger, increasingly independent buyers who see diamond and studded jewellery as everyday adornment rather than something reserved for weddings," Gaurav Singh Kushwaha, CEO and founder of BlueStone, told ET Online.

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He said demand is no longer concentrated in metropolitan cities, with Tier-II and Tier-III markets also witnessing strong acceptance of design-led studded jewellery.

BlueStone does not participate in the export market, allowing it to focus entirely on India's domestic jewellery opportunity.

When asked about the industry's outlook, Kushwaha said the company remains constructive on diamond jewellery, particularly as consumers increasingly prefer lighter, everyday pieces where design plays a bigger role than gold weight.

"We'd expect the design-led, diamond-and-studded part of the category to grow well," he said, adding that the shift also moderates dependence on gold-intensive products.

Lab-grown no longer a niche

Senco Gold has also expanded into lab-grown diamonds through its Sennes brand, although the company says the move is aimed at giving customers more choice rather than replacing natural diamonds.

"It is to give an option to customers and understand the market," Managing Director and CEO Suvankar Sen told ET Online.

Calling lab-grown diamonds "a new segment in the jewellery business,” Sen said the future prospects remain strong and the company plans to continue building the business.

Senco reported 9% growth in diamond volumes and 32% growth in diamond sales value during FY26, driven by improved product mix, lightweight jewellery and lower-priced offerings.

Natural diamonds remain central

Even as retailers expand lab-grown offerings, natural diamonds continue to dominate premium jewellery portfolios.

CaratLane introduced Shaya Diamonds, featuring natural diamonds set in silver starting at Rs 5,000 to broaden affordability, while Titan said it continues to invest in diamond authentication infrastructure, ethical sourcing and research-grade Raman spectroscopy to reinforce consumer confidence in natural diamonds.

The contrasting trends point to a structural divergence within India's diamond industry. While export-oriented manufacturers continue to grapple with weak overseas demand, inventory corrections and pricing pressure, organised retailers are increasingly betting that India's growing base of younger consumers will sustain demand for both natural and lab-grown diamond jewellery.