India Diamond Market Size, Share, Trends and Forecast by Product, Application, and Region, 2026-2034

India Diamond Market Summary:

The India diamond market size reached USD 3.49 Billion in 2025. The market is projected to reach USD 5.29 Billion by 2034, growing at a CAGR of 4.72% during 2026-2034. The market is driven by supportive government policies, including the Diamond Imprest Authorization Scheme and safe harbour tax rates that strengthen India's position as a global diamond processing leader. Moreover, aggressive retail expansion by major jewelry chains across tier-2 and tier-3 cities, coupled with rising disposable incomes and changing consumer preferences among millennials and working women, is fueling demand. Additionally, the emergence of lab-grown diamonds as a significant market segment, supported by favorable government policies and India's manufacturing capabilities, is expanding the India diamond market share.

Key Takeaways:

• The India diamond market was valued at USD 3.49 Billion in 2025.
• It is projected to reach USD 5.29 Billion by 2034, growing at a CAGR of 4.72% during 2026-2034.
• Government policy initiatives including the Diamond Imprest Authorization Scheme introduced in January 2025 provide duty-free imports for exporters, strengthening India's competitive position in global diamond processing and supporting MSME exporters while protecting domestic employment in the diamond value chain.
• Segmentation highlights:
  • Product: Natural, Synthetic
  • Application: Jewelry and Ornaments, Industrial
• Regional Insights: The report covers major zones within India: North India, South India, East India, and West India.

India Diamond Market Outlook (2026-2034):

The India diamond market is positioned for steady growth throughout the forecast period, underpinned by strong cultural affinity for diamond jewelry during weddings and festivals, which constitute the majority of demand. The expanding middle class with rising disposable incomes, particularly among millennials and working women, is driving demand beyond traditional occasions toward everyday wear and self-purchase categories. Government support through strategic policy measures, including customs duty reductions and trade facilitation schemes, will enhance manufacturing competitiveness and export potential. Furthermore, India's dominance in diamond processing, handling approximately 90% of global rough diamonds by volume, combined with growing domestic consumption and the rapid expansion of organized retail networks, will sustain positive market momentum throughout the forecast period.

Impact of AI:

Artificial intelligence is transforming India's diamond processing industry by enabling precision manufacturing and quality optimization. AI-powered systems analyze the unique characteristics of each rough diamond to determine optimal cutting strategies, maximizing yield and value while reducing material waste. Advanced AI-driven automated cutting, sorting, and grading systems enhance consistency, reduce human error, and accelerate processing timelines. These technologies are particularly valuable in India's competitive diamond manufacturing sector, where efficiency gains translate directly into cost advantages and improved margins. As AI capabilities mature, their adoption across diamond planning, manufacturing execution, and quality control will strengthen India's position as the world's leading diamond processing hub.

Market Dynamics:

Key Market Trends & Growth Drivers:

Government Policy Support and Trade Facilitation Measures

The Indian government is playing a pivotal role in strengthening the diamond industry through targeted policy interventions aimed at enhancing competitiveness and sustaining India’s global leadership in diamond processing. The newly introduced Diamond Imprest Authorization Scheme, effective April 2025, permits duty-free imports of small natural cut and polished diamonds for qualified exporters, directly addressing beneficiation policies in producing countries that threaten India’s raw material access. This initiative safeguards domestic processing capacity, supports MSMEs, and preserves employment across major polishing hubs. Additionally, the safe harbour rates for foreign mining companies have simplified taxation, minimized disputes, and encouraged direct diamond trading with Indian processors, reducing dependence on intermediaries like Dubai. Complementary reforms—including reduced customs duties on precious metals and Authorized Economic Operator (AEO) status—have streamlined export-import operations through faster clearances and lower guarantee requirements. Collectively, these policies create a more predictable and efficient regulatory environment that bolsters investor confidence, sustains employment for over a million workers, and reinforces the diamond industry’s strategic contribution to India’s export portfolio and broader economic growth.

Aggressive Retail Expansion and Premiumization Strategy

India’s jewelry retail landscape is undergoing rapid transformation, driven by aggressive expansion and premiumization strategies from major organized players targeting new consumer bases in smaller cities. Corporations such as Titan Company have adopted multi-brand approaches, Tanishq, Zoya, CaratLane, and Mia, catering to distinct market segments ranging from traditional buyers to younger, aspirational consumers. This wave of expansion mirrors China’s earlier retail evolution and reflects India’s rising middle-class purchasing power and preference for branded jewelry offering transparency, certification, and buyback guarantees. Organized chains like Malabar Gold & Diamonds, Kalyan Jewellers, and Senco Gold are broadening their presence in tier-2 and tier-3 cities, capitalizing on the growing appetite for contemporary designs and diamond-studded collections. Simultaneously, changing consumer behavior, especially among working women embracing jewelry as self-expression, has accelerated diamond jewelry adoption nationwide. Retailers are allocating more space to studded jewelry, investing in consumer education about diamond quality, and integrating digital channels for personalized shopping experiences. This retail infrastructure expansion, combined with enhanced customer experiences, digital integration, and aggressive marketing campaigns, creates a robust foundation for sustained market growth throughout the forecast period.

Emergence and Growth of Lab-Grown Diamonds

India is rapidly emerging as a global leader in lab-grown diamond (LGD) production, leveraging its established expertise in cutting and polishing to capture a growing share of this sustainable and affordable market. Supported by favorable government policies—such as the elimination of the 5% customs duty on diamond seeds and the creation of distinct import codes for LGDs—the sector benefits from reduced input costs and greater regulatory clarity. Concentrated mainly in Gujarat and Maharashtra, LGD manufacturing employs advanced Chemical Vapor Deposition (CVD) technology to produce high-quality stones with fewer impurities. This has attracted substantial private investment, generating skilled employment and export growth, particularly to the US, UAE, and Hong Kong. Domestically, rising awareness among millennials and Gen Z consumers about ethical sourcing and environmental responsibility has boosted LGD jewelry demand, prompting major retailers to introduce lab-grown options alongside natural diamonds. Despite ongoing challenges such as price fluctuations and energy-intensive production, India’s cost-efficient infrastructure, technical expertise, and government backing position it to dominate the evolving global LGD landscape while reinforcing its leadership in diamond processing.

Key Market Challenges:

Export Decline and Weak Global Demand

India’s diamond export industry is facing its steepest decline in two decades, reflecting severe global demand contraction and structural pressures across the value chain. The downturn stems from weakened consumer spending in key markets such as the United States and China, where inflation, economic uncertainty, and a growing preference for lab-grown diamonds have eroded demand for natural stones. Indian manufacturers are struggling with rising inventories, shrinking margins, and declining production volumes as order cancellations and delayed shipments intensify financial strain. Many small and medium-sized processing units in Surat and Mumbai have reduced operations or permanently shut down, leading to widespread unemployment and liquidity challenges. The buildup of unsold stock has locked significant working capital, while falling exports and rough diamond imports highlight deep market imbalances. As households in Western markets reallocate discretionary spending toward experiences and alternative luxury goods, India’s traditionally dominant diamond sector faces a prolonged recovery path. Structural reforms, targeted financial assistance, and diversification into lab-grown segments are increasingly viewed as essential to restoring stability and competitiveness in the coming years.

US Tariff Uncertainties and Trade Policy Volatility

Proposed tariff hikes on Indian diamond imports by the United States have triggered significant unease within India’s diamond sector, exposing its heavy reliance on the American market and amplifying trade volatility. Although implementation was temporarily delayed, the potential 50% tariff threatens to disrupt supply chains, distort export patterns, and weaken India’s competitive position relative to countries facing lower duties. Exporters are already experiencing shipment delays, cautious ordering, and tightening credit conditions as buyers await policy clarity. The uncertainty has also spurred discussions about rerouting trade through intermediary markets such as the UAE or Mexico, though such measures carry regulatory and reputational risks. Currency fluctuations, increased scrutiny from US customs authorities, and longer clearance timelines are adding to operational costs and liquidity pressures for exporters. While trade agreements with the UK offer limited relief, they cannot offset potential losses from the U.S. market. Persistent policy unpredictability continues to erode business confidence, discouraging long-term contracts and investment. The industry urgently requires stable trade frameworks and diplomatic engagement to prevent lasting structural damage to its export competitiveness and employment base.

Price Volatility and Inventory Management Challenges

India’s diamond sector is grappling with intense price volatility and severe inventory management issues that are undermining profitability and operational resilience. Falling global diamond prices, combined with an oversupply of rough stones and competition from cheaper lab-grown alternatives, have squeezed margins for manufacturers who purchased at higher input costs. Many processors are burdened with unsold inventories that tie up working capital and limit new production cycles, while extended credit terms from international buyers exacerbate liquidity shortages. Banks have tightened lending, compounding financial stress, particularly for small and mid-sized firms lacking collateral or alternative funding sources. The mismatch between rough diamond costs and declining polished diamond prices has disrupted the traditional value chain, prompting factory closures, production cuts, and workforce reductions. Inefficiencies in customs handling, quality reassessment, and product returns further delay cash flow recovery. Meanwhile, high taxation on foreign suppliers has redirected imports through low-tax hubs like Dubai, increasing transaction complexity. Without coordinated regulatory reforms, credit relief, and targeted policy support, the sector risks prolonged stagnation as global luxury demand remains muted and prices continue to fluctuate.

India Diamond Market Report Segmentation:

IMARC Group provides an analysis of the key trends in each segment of the India diamond market, along with forecasts at the country and regional levels for 2026-2034. The market has been categorized based on product and application.

Analysis by Product:

• Natural
• Synthetic

The report has provided a detailed breakup and analysis of the market based on the product. This includes natural and synthetic.

Analysis by Application:

• Jewelry & Ornaments
• Industrial

A detailed breakup and analysis of the market based on the application have also been provided in the report. This includes jewelry and ornaments and industrial.

Analysis by Region:

• North India
• South India
• East India
• West India

The report has also provided a comprehensive analysis of all the major regional markets, which include North India, South India, East India, and West India.

Competitive Landscape:

The India diamond market demonstrates a concentrated structure with organized retail players increasingly dominating the landscape alongside numerous small and medium-sized processing units. Competition centers on quality assurance, brand reputation, design innovation, pricing transparency, and customer service excellence. Major corporate jewelry chains leverage economies of scale, sophisticated supply chain management, and extensive retail networks to capture market share from unorganized players. The processing segment remains fragmented, with Surat and Mumbai hosting thousands of cutting and polishing units ranging from family-owned workshops to large integrated manufacturers. Key players focus on vertical integration from rough diamond sourcing through retail distribution, enabling better quality control, margin optimization, and customer trust building. International players are entering or expanding in India through partnerships and store openings, attracted by the market's growth potential and rising consumer affluence.

India Diamond Market Industry Latest Developments:

• August 2024: Titan Company's flagship jewelry brand Tanishq announced a three-year strategic collaboration with De Beers Group to promote natural diamonds in India through consumer education, retail staff training, authenticity assurance, and comprehensive marketing campaigns. The partnership aims to capitalize on India's emergence as the world's second-largest natural diamond jewelry market, representing approximately 11% of global demand, by combining Tanishq's deep understanding of the Indian market with De Beers' diamond category expertise.
• November 2024: The Maharashtra government launched the Gems and Jewellery Policy 2025, targeting investments of Rs. 1 lakh crore and creation of 5 lakh jobs. The policy includes provisions for the India Jewellery Park Mumbai project spread over 21 acres in Navi Mumbai, expected to generate over 1 lakh jobs with an estimated investment of Rs. 50,000 crore, aimed at doubling the state's exports while transforming informal businesses into recognized industries through regulatory support and financial incentives.
• July 2024: The Union Budget 2024 introduced safe harbour rates for foreign mining companies selling raw diamonds in India. Finance Minister Nirmala Sitharaman announced predetermined tax rates to simplify compliance, reduce dispute risks, and create a more attractive investment environment for international mining companies, supporting India's diamond cutting and polishing industry that employs large numbers of skilled workers while fostering partnerships between domestic and international players.

India Diamond Market Report Coverage:

Key Questions Answered in This Report:

• How has the India diamond market performed so far and how will it perform in the coming years?
• What is the breakup of the India diamond market on the basis of product?
• What is the breakup of the India diamond market on the basis of application?
• What is the breakup of the India diamond market on the basis of region?
• What are the various stages in the value chain of the India diamond market?
• What are the key driving factors and challenges in the India diamond market?
• What is the structure of the India diamond market and who are the key players?
• What is the degree of competition in the India diamond market?

Key Benefits for Stakeholders:

• IMARC's industry report offers a comprehensive quantitative analysis of various market segments, historical and current market trends, market forecasts, and dynamics of the India diamond market from 2020-2034.
• The research report provides the latest information on the market drivers, challenges, and opportunities in the India diamond market.
• Porter's five forces analysis assist stakeholders in assessing the impact of new entrants, competitive rivalry, supplier power, buyer power, and the threat of substitution. It helps stakeholders to analyze the level of competition within the India diamond industry and its attractiveness.
• Competitive landscape allows stakeholders to understand their competitive environment and provides an insight into the current positions of key players in the market.