Projected to account for about 16 per cent of the global diamond market by 2029, lab-grown diamonds are gaining ground as evolving consumer values favour them over natural ones.
Driven by evolving consumer preferences, rising disposable incomes and global fashion trends, the diamond industry is undergoing a shift from traditional gold to diamond-studded jewellery. Lab-grown diamonds (LGDs), propelled by affordability, sustainability and innovation, are at the forefront of this transformation and are projected to account for nearly 16 per cent of the global diamond market by 2029.
Natural diamonds have long symbolised luxury, but shifting consumer values are challenging their appeal. As per a report by Redseer Strategy Consultants, high costs, ethical concerns over mining practices and increasing awareness of sustainable alternatives are prompting buyers to explore LGDs as a viable and desirable option.
India: Next Global Hub For LGDs
While India’s lab-grown diamond jewellery market is still small in size, estimated at USD 300 to 350 million as of 2024, the report added that it is projected to grow at around 15 per cent compounded annual growth rate (CAGR) over the next decade. Leveraging digital channels to build awareness and credibility, Indian brands are also aggressively entering the market.
India is the largest LGD exporter in the world, accounting for 28.6 per cent of global lab-grown diamond exports in 2023, as per the report, which cited the data from the Gem and Jewellery Export Promotion Council (GJPEC). Having produced around 35 per cent of the world’s LGDs in Calendar Year 2023, India holds several strategic advantages that make it a natural hub for lab-grown diamond production and export.
Already responsible for cutting and polishing of over 90 per cent of the world’s diamonds, India possesses a robust infrastructure for backwards integration into LGD manufacturing, as per the report, which also mentioned that the country’s cost-efficient craftsmanship and policy incentives are playing a crucial role.
Backed by favourable government policies, rising domestic consumption and a movement in consumer tastes, the industry players estimate that the market for lab-grown diamond jewellery in India is expected to reach USD 1.2 billion by 2033, growing at a 14.8 per cent compound annual growth rate (CAGR).
Affordability Driving Sector’s Growth
Accessibility and affordability are the primary drivers, with lab-grown diamonds priced 60 to 90 per cent lower than natural diamonds. This cost advantage makes them accessible to a broader consumer base. Industry leaders noted that growing consumer awareness of sustainability and government assistance, such as subsidies and legislative incentives, are important growth drivers as well.
“Affordability, ethical sourcing and increasing design innovation are major growth drivers. Lab-grown diamonds are up to 60 to 70 per cent more affordable than mined diamonds, making luxury more accessible. Their sustainable nature also appeals to environmentally conscious consumers,” explained Namita Kothari, Founder, Akoirah by Augmont.
Kothari added that rising gold prices have further pushed buyers to explore LGDs as a more value-driven alternative. Social media visibility and influencer endorsements are boosting discovery, especially for lightweight gifting options.
Shift Towards Conscious Consumption
With increasing environmental awareness and ethical considerations influencing consumer choices, especially amongst millennials and generation Z, technological advancements have improved the quality and availability of LGDs, further fuelling demand. Industry players remarked that individuals are now seeking jewellery that not only complements their lifestyle but also aligns with their values.
“Key trends include a growing consumer preference for sustainable and ethically sourced products, coupled with a demand for versatile designs that seamlessly transition from everyday wear to special occasions. This shift reflects a broader movement towards conscious consumption, where individuals seek jewellery that not only complements their lifestyle but also aligns with their values,” Vidita Kochar Jain, Co-founder of Jewelbox, told BW Businessworld.
Ensuring Long-term Sustainability
To maintain affordability and long-term sustainability, the sector must invest in scalable technology, efficient production processes, and transparency in sourcing. Industry players highlighted that as global demand rises, keeping energy consumption and manufacturing costs low will be key.
“The industry must deal with overproduction and set strict quality standards to avoid market saturation and guarantee customer trust to preserve affordability and sustainability. Environmental sustainability may be improved by making industrial investments in renewable energy sources,” highlighted Tarun Bansal, Director of Bansal and Sons Jewellers.
Consumer education will also play a vital role, helping buyers differentiate between quality grades and understand the true value of LGDs. Jain emphasised that on the sustainability front, advancements in manufacturing technologies are enhancing energy efficiency and reducing environmental impact. The development of eco-friendly production methods ensures the LGD industry’s commitment to sustainable practices.
As the market evolves, large-scale retailers and luxury houses are actively shaping the trajectory of LGDs as they drive sales volumes and act as an affordable entry point for consumers. As consumer demand pivots toward value-driven luxury, brands that embrace lab-grown diamonds now, backed by sustainability and design innovation, will lead the next chapter of the jewellery market.
