The Indian diamond industry has a rich and fascinating history, dating back thousands of years. From the legendary Golconda mines to the bustling diamond-cutting and polishing hubs of Surat and Mumbai, India has played a pivotal role in the global diamond trade. This blog delves into the captivating journey of India’s diamonds industry, exploring its origins, its current state as of 2025, and its intricate international connections.
The Origins of India’s Diamond Industry
Diamonds mining in India can be traced back to the 5th century BC. For over a millennium, India was the sole source of diamonds in the world, with the Golconda mines in Andhra Pradesh yielding some of history’s most famous gems, including the Koh-I-Noor, the Hope Diamond, and the Regent Diamond. These diamonds were renowned for their exceptional quality and translucence, captivating the world with their brilliance.
India’s dominance in the diamond trade continued until the 18th century when diamonds were discovered in Brazil. However, India’s expertise in diamond cutting and polishing remained unparalleled. By the mid-1960s, the modern diamond cutting industry in India began to flourish, and today, India accounts for about 70% by weight and 35% by wholesale value of the diamonds polished annually worldwide.
The Indian Diamond Industry in 2025
The Indian diamond industry is currently experiencing a period of dynamic growth and transformation. As of 2025, India has surpassed China to become the world’s second-largest diamond market, trailing only the United States. The domestic diamond market is valued at $8.7 billion, representing a tenth of the country’s $85 billion gem and jewellery industry. This remarkable growth is fuelled by a burgeoning middle class with increasing disposable incomes and a deep-rooted cultural affinity for diamonds. Notably, India boasts the youngest major diamond-consuming population globally, with millennials and Gen Z comprising 70% – a demographic trend that holds immense promise for the industry’s future.
The Gem & Jewellery Export Promotion Council (GJEPC) projects that the Indian diamond market will reach $17 billion by 2030, driven by this rising consumer demand. The lab-grown diamond sector is also contributing to the industry’s expansion, with a market value of approximately $2 billion, primarily driven by exports. Furthermore, India holds a unique position as the world’s largest exporter of cut and polished diamonds, accounting for 7.9% of the global market revenue in 2024. Looking ahead, India’s diamond imports are predicted to increase to $33 billion by 2026, up from $29 billion in 2021, while exports are expected to reach $30 billion by 2026, up from $27 billion in 2021.
Key Growth Trends Shaping the Industry
Several key trends are shaping the Indian diamond industry in 2025:
- Reimagining the Natural Diamond Narrative: With the rise of lab-grown diamonds, the industry is actively promoting the unique story and value of natural diamonds. This involves emphasizing their rarity, emotional significance, and enduring legacy. There’s a growing focus on responsible diamond sourcing and production, catering to consumers who are increasingly conscious of sustainability and ethical practices. To further bolster the image of natural diamonds, industry leaders have agreed to establish an industry-wide fund to support category marketing.
- Enhanced Trust and Transparency: Coupled with the focus on ethical sourcing, consumers are demanding greater transparency across the diamond supply chain. Initiatives such as blockchain technology and third-party certifications are being implemented to enhance trust and traceability, providing verifiable information about a diamond’s origin and journey.
- Personalization and Customization: There is a growing demand for personalized and customized diamond jewellery, particularly in the high-end segment. Brands are collaborating with designers to offer unique and bespoke pieces that cater to individual preferences.
- Lab-Grown Diamonds and Fancy Shapes: The lab-grown diamond market is expanding rapidly, with increasing demand for fancy shapes and colours. The lab-grown diamond jewellery market is expected to grow by 20-25% annually in key markets. Advanced grading technologies are being developed to support the LGD market and ensure high-quality diamond reports.
- Advanced Technology Integration: The diamond industry is embracing advanced technologies such as AI-based grading, laser inscription, and blockchain to enhance efficiency, accuracy, and transparency across all stages of the supply chain.
- Holistic Consumer Experiences: Brands are focusing on creating holistic consumer experiences that go beyond product quality and price. Storytelling, personalized services, and immersive experiences are becoming increasingly important to engage consumers on an emotional level and foster brand loyalty. The rise of e-commerce is also transforming how consumers purchase diamonds, with online sales expected to increase significantly in the coming years. This necessitates a digital shift for businesses to cater to evolving consumer preferences and provide seamless online experiences.
India’s International Diamond Connections
India’s diamond industry has strong international connections, with major import and export partners across the globe. The United States, Hong Kong, Belgium, the United Arab Emirates, and Thailand are among the key export destinations for Indian diamonds. The United States and Belgium are also significant import partners, supplying rough diamonds to India for cutting and polishing. This highlights India’s crucial role as a processing hub in the global diamond supply chain.
International collaborations and initiatives are further strengthening India’s position in the global diamonds market. The GJEPC has partnered with De Beers Group to launch the Indian Natural Diamond Retailer Alliance (INDRA), which aims to support independent retailers through marketing and training programs. This collaboration underscores the industry’s commitment to fostering growth and collaboration across the diamond value chain.
The Impact of the Diamond Industry on the Indian Economy
The diamond industry plays a vital role in the Indian economy, contributing significantly to employment generation, foreign exchange earnings, and GDP growth. The sector employs over 4.64 million people, including approximately 1.5 million workers in Surat alone. It accounts for about 7% of the country’s GDP and 15% of its total exports, making it a crucial driver of economic growth and a significant source of foreign exchange earnings.
The government recognizes the importance of the diamond industry and has implemented various policies and initiatives to support its growth. These include allowing 100% Foreign Direct Investment (FDI) in the sector, establishing special economic zones (SEZs) for diamond processing, and providing skill development programs for workers.
The Role of the Indian Government
The Indian government plays a crucial role in supporting the diamond industry’s growth through various policies, regulations, and initiatives:
- Diamond Imprest Authorization (DIA) Scheme: Launched in 2025, this scheme allows duty-free imports of smaller diamonds (less than ¼ carat), including semi-processed, broken, and half-cut diamonds. It aims to promote value addition and boost exports by mandating a 10% value addition on exports. The scheme is open to exporters with Two Star Export House status and above, with at least $15 million in exports annually for the past three years. The DIA scheme is valid for one year for imports and 18 months for exports. This initiative is crucial for maintaining India’s competitiveness in the global diamond market, particularly in the face of beneficiation policies in diamond-producing countries that require local processing.
- Export Promotion: The government provides incentives and support for diamonds exports, helping Indian companies compete in the global market.
- Skill Development: The government supports skill development programs to train workers in the latest diamonds processing technologies. This includes training in automation, AI-based quality checks, and precision cutting techniques, ensuring the industry has a skilled workforce to adapt to technological advancements.
- Ease of Doing Business: The government is working to improve the ease of doing business in the diamond sector, simplifying regulations and procedures. However, it’s important to ensure that these reforms do not disproportionately impact small-scale traders who may face difficulties adapting to new tax structures and compliance requirements. Providing additional financial aid and regulatory support for smaller traders is crucial to ensure a level playing field for all players in the industry.
Challenges and Opportunities
While the Indian diamonds industry is poised for growth, it also faces challenges:
- Competition from Other Countries: India faces competition from other diamonds-producing and processing countries, such as China, Vietnam, and Israel.
- Technological Advancements: The industry needs to adapt to technological advancements in diamonds cutting and polishing to maintain its competitiveness.
- Sustainability Concerns: There is growing pressure to address environmental and ethical concerns related to diamonds mining and processing.
- Lab-Grown Diamonds: The rise of lab-grown diamonds poses a challenge to the natural diamond market, requiring the industry to adapt and innovate.
- Inventory Management: The diamond sector faced challenges in 2024 with managing inventory levels, despite reduced purchases following the 2023 crisis.
Despite these challenges, the Indian diamond industry has significant opportunities:
- Growing Domestic Market: India’s growing middle class and increasing disposable incomes present a significant opportunity for the domestic diamond market.
- Expanding Export Markets: The industry can explore new export markets and strengthen its presence in existing ones.
- Technological Advancements: Embracing technological advancements can enhance efficiency, quality, and competitiveness.
- Sustainability and Ethical Practices: Adopting sustainable and ethical practices can enhance the industry’s reputation and appeal to environmentally conscious consumers.
A Sparkling Future
India’s diamonds industry has a long and illustrious history, and it continues to shine brightly in the global market. With its expertise in diamonds cutting and polishing, a growing domestic market, and supportive government policies, the industry is well-positioned for continued growth and success. By embracing innovation, sustainability, and international collaborations, India’s diamond industry can solidify its position as a global leader in the years to come.
The industry’s future success hinges on several key factors. Firstly, adapting to the rise of lab-grown diamonds and effectively communicating the unique value proposition of natural diamonds will be crucial. Secondly, continued investment in technology and skill development will ensure that India remains at the forefront of diamond processing and manufacturing. Thirdly, embracing sustainable and ethical practices will be essential to meet the evolving demands of consumers and maintain a positive reputation in the global market.
As India’s diamond industry continues to evolve, it presents exciting opportunities for businesses, investors, and consumers alike. By staying informed about the latest trends, challenges, and opportunities, stakeholders can contribute to the continued growth and prosperity of this dynamic sector.
