India Diamond Market: Polishing Industry, Exports & Forecast 2026–2031

The India diamond market represents one of the most structurally complex ecosystems in the global diamond value chain, defined by a deep contradiction between upstream dominance and downstream acceleration. The domestic market size is expected to corss USD 7.38 billion in 2031. India continues to process approximately 90 percent of global rough diamonds by volume, as consistently highlighted in trade disclosures from the Gem & Jewellery Export Promotion Council, yet its domestic diamond jewellery market has only recently emerged as the second largest globally after the United States. Government-backed industry estimates and association data indicate strong expansion in the overall gems and jewellery sector, with natural diamond jewellery forming a significant and fast-growing component. For top management, India is no longer just a processing hub; it is simultaneously a consumption engine, a manufacturing backbone, and a geopolitical pressure point exposed to global trade policy shifts, particularly from the United States.
Three high-impact structural drivers are reshaping the Indian diamond market, and the balance between them is redefining industry economics. First, the sustained decline in polished diamond exports has fundamentally disrupted India’s traditional business model. Export data published by the Gem & Jewellery Export Promotion Council confirms a sharp contraction in cut and polished diamond shipments, reaching multi-decade lows in recent periods, driven by weak global demand, inventory corrections, and tariff pressures. The imposition of elevated tariffs by the United States on Indian diamond products has materially reduced export competitiveness, leading to order cancellations, working capital stress, and significant employment disruption in key processing hubs such as Surat. Second, the rapid expansion of lab-grown diamonds is altering both export and domestic consumption dynamics. Industry and trade data confirm a multi-fold increase in lab-grown diamond exports over recent years, positioning India as one of the leading global suppliers of synthetic stones. Domestic adoption is also accelerating, supported by affordability and increasing retailer acceptance. Third, and structurally positive, domestic diamond jewellery consumption is expanding at one of the fastest rates globally. Leadership commentary from De Beers Group and industry bodies indicates that India’s diamond jewellery market is expected to expand significantly over the decade, supported by rising incomes, urbanisation, and the formalisation of retail. This shift marks a transition from export dependency toward internal demand resilience.
India’s diamond market faces three structural challenges. First, US tariff policy has devastated polished exports, with shipments to the US falling by more than half in two years. Second, the structural shift toward lab grown diamonds is accelerating – natural polished exports are collapsing while lab grown exports have grown six fold, forcing the Surat cutting industry to retool. Third, employment pressures in Gujarat and elsewhere are mounting; if the cutting industry does not transition to synthetics, large scale job losses will trigger social and political consequences. The Gem and Jewellery Export Promotion Council reported a 22.72% decline in cut and polished diamond exports in Q1 2025. US tariffs have reduced India’s diamond exports to the US by over 50% in two years. The Surat Diamond Bourse (world’s largest by floor space) is now operational.
Segmentation across India reveals a dual-speed structure with clear divergence between export and domestic markets. Natural diamonds continue to dominate value within domestic jewellery consumption, particularly in bridal and investment-linked purchases, while lab-grown diamonds are scaling rapidly from a smaller base, especially in urban and price-sensitive segments. In exports, however, the trend has inverted: natural polished diamonds face structural decline, while lab-grown exports continue to expand. Application remains heavily skewed toward jewellery, though industrial diamonds maintain a steady presence in manufacturing and tooling. Distribution is defined by fragmentation. Industry estimates suggest that a significant portion of India’s jewellery market remains unorganised, with organised retail steadily gaining share, driven by consumer preference for certification, transparency, and brand trust. This transition is one of the most important structural shifts underway, with direct implications for quality standards and pricing discipline.
The supply chain in India is unparalleled in its scale and complexity. Surat remains the global epicentre of diamond cutting and polishing, supported by trading infrastructure such as the Bharat Diamond Bourse and the Surat Diamond Bourse. India imports rough diamonds from multiple producing regions including Russia (often routed through intermediaries due to sanctions), Botswana, Canada, and African producers, and exports polished diamonds to major markets such as the United States, UAE, Hong Kong, Belgium, and Israel. Trade data from the Gem & Jewellery Export Promotion Council highlights a decline in rough imports in recent periods, reflecting reduced processing demand and inventory correction cycles. The competitive landscape includes large integrated players such as Rajesh Exports, Titan Company, and Malabar Gold & Diamonds, alongside thousands of small and medium enterprises that form the backbone of the industry. Employment remains a critical dimension, with millions dependent on the sector and recent export declines translating directly into job losses.
Strategic implications for top management are immediate and differentiated by stakeholder. For brand owners, India represents one of the most compelling growth markets globally, driven by rising middle-class consumption and increasing preference for branded jewellery. The coexistence of strong growth in both natural and lab-grown segments requires a dual-product strategy rather than substitution. For investors, the formalisation of the retail sector presents a structural opportunity. As organised players gain share, scalability, margin expansion, and brand-driven differentiation become achievable. For procurement leaders, the current environment represents a buyer’s market for natural polished diamonds, given excess supply and weak export demand. However, tariff exposure particularly to the United States remains the single largest external risk, necessitating diversification toward alternative markets in the Middle East, Europe, and Asia. For manufacturers, especially in Surat, the transition toward lab-grown processing capabilities is no longer optional; it is a strategic necessity to sustain volumes and margins.
The policy and institutional landscape in India is relatively strong and supportive. The Gem & Jewellery Export Promotion Council plays a central role in trade facilitation, export promotion, and policy advocacy, while institutions such as the Bharat Diamond Bourse provide critical infrastructure for global trade integration. Government initiatives aimed at boosting exports, improving ease of doing business, and supporting manufacturing competitiveness continue to shape the sector. At the same time, external policy risks particularly tariffs imposed by major importing countries have a disproportionate impact on industry performance.
Pricing dynamics in India reflect global pressures combined with domestic structural shifts. Natural diamond prices, particularly for commercial-grade stones, are under downward pressure due to oversupply and weak export demand. Larger stones and premium categories remain relatively resilient but face reduced liquidity. Lab-grown diamonds, by contrast, are experiencing rapid price compression driven by technological scaling and increased supply, making them increasingly competitive across multiple consumer segments. This divergence is accelerating substitution trends in both domestic and export markets.
A PESTEL analysis of India’s diamond market reveals acute exposure to external political and economic forces. Politically, US tariff policy is the dominant risk – India’s diamond exports to the US have halved in two years. Economically, domestic consumption is booming (12% CAGR), but export revenues are collapsing, creating a two speed industry. Socially, rising affluence and formalisation of jewellery retail are driving domestic demand. Technologically, India is the global leader in natural diamond cutting and polishing, but lab grown capabilities are scaling rapidly. Environmentally, the Surat polishing industry faces scrutiny on working conditions and waste. Legally, the Gem and Jewellery Export Promotion Council and the Kimberley Process provide compliance frameworks.
Looking forward to 2026–2031, the Indian diamond market will be shaped by a defined set of variables. The trajectory of US trade policy remains the most critical external factor; any easing of tariffs would significantly revive export volumes. The pace of domestic consumption growth will determine how effectively India can offset export volatility. The expansion of organised retail will influence pricing transparency, certification standards, and consumer trust. The continued growth of lab-grown diamond exports will reshape global supply dynamics and further pressure natural diamond pricing. Finally, India’s ability to maintain its dominant position in global cutting and polishing amid emerging competition from alternative processing hubs will define its long-term strategic relevance.
The competitive reality is that India is transitioning from a volume-driven export powerhouse to a more balanced ecosystem combining manufacturing, domestic consumption, and technological adaptation. The winners will be those who align with domestic demand growth, invest in lab-grown capabilities, and diversify export exposure beyond traditional markets. Those that remain dependent on tariff-sensitive export channels without adapting to structural shifts risk prolonged margin compression and operational instability.

Market Consideration.
Base year: 2025
Estimated year: 2026
Forecast Year: 2031

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Priyanka Makwana

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