India's polished lab-grown diamond (LGD) exports have overtaken natural diamonds in volume for the first time in the fiscal year 2025-26, signaling a decisive shift in the global diamond trade. This milestone is driven by rapid manufacturing growth and rising affordability.
Export Data Highlights
Provisional data for FY 2025-26 shows that India exported 18.8 million carats of polished lab-grown diamonds, compared to 16 million carats of cut and polished natural diamonds. Industry players expect the gap to widen further as LGD manufacturing capacity expands.
A decade ago, the scenario was starkly different. In 2015-16, India exported 33.51 million carats of cut and polished natural diamonds, while polished LGD exports were merely 100,000 carats. Over ten years, the lab-grown segment has grown from a negligible base to surpass an industry built over more than five decades.
Value Comparison and Strategic Importance
In value terms, natural diamonds remain far ahead. The average export price of natural diamonds is about $760 per carat, compared to $60 per carat for polished LGDs. Despite this price gap, industry leaders emphasize that building scale in the lab-grown segment was strategically necessary, especially to compete with China. They note that LGDs are becoming increasingly important in jewelry manufacturing and are gaining consumer acceptance at a much faster pace than natural diamond jewelry in several markets.
Market Expansion and Consumer Trends
Market experts attribute the growth largely to affordability. Lower prices have opened demand in countries and consumer segments where natural diamonds had little or no presence. LGDs are thus expanding the jewelry market rather than merely replacing natural diamonds. Industry observers also point out that while geopolitical tensions have disrupted parts of the natural diamond trade, the impact on LGDs has been relatively limited.
"Due to good quality of LGDs and affordable prices, they are becoming popular in new markets. There is demand from countries where there was no market for natural diamonds," said Vallabh Lakhani, chairman of Kira Diam. "Manufacturing will grow further."
Future Prospects and Investment
Despite rising production and declining per-carat prices, the LGD sector continues to attract fresh investment. Experts suggest that future growth may extend beyond jewelry, with potential applications in semiconductors and other technologies, where demand could emerge in far larger volumes.
"Natural diamonds have limited buyers due to their prices, and a segment of buyers will continue to buy natural high-value diamonds. But LGDs have emerged as an option for others and markets in several other countries are opening. This has created a market for our jewelry as well," said Dinesh Navadiya, chairman of the Indian Diamond Institute.
