For centuries, gold has been the undisputed choice for jewellery, especially in India. However, India’s jewellery market is undergoing a transformation. Diamonds are rapidly gaining prominence, from ~7% of the jewellery market in 2019 to ~17% in 2024, expected to grow to 22-27% by 2029, at ~20% CAGR – a trend mirrored across the globe. The trend is particularly observable among younger consumers who seek aspirational, modern designs. This shift is particularly pronounced in urban India, where evolving tastes, rising disposable incomes, and global fashion influences are driving a preference for diamond-studded jewellery over traditional gold pieces. Within this transformation, lab-grown diamonds (LGDs) have emerged as a game-changer, reshaping the industry with affordability, sustainability, and innovation. 

The Rise of Lab-Grown Diamonds: Transformation of the Diamond Industry 

The diamond industry is undergoing a major transformation, with lab-grown diamonds (LGDs) rapidly gaining ground over their natural counterparts, expected to make up ~16% of the global diamond market by 2029, up from~12% in 2024 and ~9% in 2019. While natural diamonds have long been associated with luxury and status, shifting consumer priorities are challenging their dominance. 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. 

• Affordability: LGDs are priced 70-80% lower than natural diamonds on a per-carat basis, making them more accessible to a wider audience. 

• Sustainability: Environmentally conscious consumers are favoring LGDs, as they eliminate the need for mining and reduce carbon footprints. 

• Aesthetic and Quality Parity: Technological advancements have made LGDs visually and chemically identical to natural diamonds, removing concerns over quality, with ease of customization of colors, sizes, and clarity during the production process 

• Brand Acceptance: Global and Indian jewellery brands alike are integrating LGDs into their collections, further driving mainstream acceptance. 

India’s lab-grown diamond jewellery market is a small market (est. $300-350 Mn as of 2024), but growing at ~15% CAGR over the next decade. 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. Jewellery brands are gradually pivoting from exclusively natural/mined diamonds in favor of lab-grown alternatives, while high-end jewelers are incorporating LGDs into select collections. Indian brands are also aggressively entering the market, leveraging digital channels to build awareness and credibility. The demand is further driven by increased consumer exposure to international jewellery trends via social media and e-commerce platforms, making LGDs a preferred choice for modern buyers. Furthermore, the adoption of 3D printing, AI-driven design, and laser cutting enables personalized, high-margin LGD jewellery. 

India at the Forefront: The Next Global Hub for Lab-Grown Diamonds 

India is not just participating in the LGD revolution but leading it. India is the largest LGD exporter in the world, accounting for 28.6% of global lab-grown diamond exports in 2023, as per the Gem & Jewellery Export Promotion Council (GJPEC).  

India is also the second largest in terms of rough  LGD  manufacturing in the world, after China – India produced ~35% of the world’s LGDs in CY 2023. The country holds several strategic advantages that make it a natural hub for lab-grown diamond production and export: 

• Existing Diamond Processing Infrastructure: India is already responsible for cutting and polishing of over 90% of the world’s diamonds, providing a robust infrastructure for backwards integration into LGD manufacturing. 

• Cost-Efficient Craftsmanship: India’s skilled and competitive labor cost enables mass production at lower price points than most countries, making India a hub for both luxury and mass-market LGD jewellery 

• Government Support: Policy incentives, research grants, favorable FDI regulations, and customs duty exemptions are fuelling investment in LGD manufacturing and certification.  

Surat: The Diamond Capital of India 

Surat, the heart of India’s diamond processing industry, has emerged as a global leader in LGD manufacturing. The city is already home to thousands of traditional diamond-cutting and polishing units and processes 90-95% of the world’s gem-quality LGDs for cutting and polishing. It has now embraced lab-grown diamonds with significant investment in cutting-edge chemical vapor deposition (CVD) technology, making it cheaper, more sustainable, and ideal for cost-effective mass production. Production facilities are rapidly expanding to meet growing global demand. In 2023, the city also inaugurated the world’s largest jewellery and diamond business center, Surat Diamond Bourse, built up over 6.6 million sq. ft. of area, encompassing 4,500 offices for national & international traders. 

With its deep-rooted expertise in diamonds, world-class jewellery craftsmanship, and strong supply chain networks, India is positioned to dominate the global lab-grown diamond and jewellery market. The country’s ability to offer quality, affordability, and scalability makes it a preferred partner for international luxury brands and retailers looking to expand their sustainable jewellery offerings. 

Opportunities for Businesses and Investors 

The lab-grown diamond (LGD) industry is still in its early stages but is expanding rapidly, creating significant opportunities for startups, investors, and established players. India leads the global LGD startup ecosystem with 35+ LGD startups, the largest in the world. Investor confidence is rising sharply. In the first 3 months of 2025 alone, Indian LGD startups raised over $14 million, over 50% year-on-year increase compared to the entire 2024. While funding amounts remain modest, they reflect strong momentum in a sector that is just beginning to scale. 

The lab-grown diamond industry offers immense potential for startups, investors, and corporates. Startups can innovate in manufacturing and direct-to-consumer retail, while investors capitalize on high-margin, scalable ventures. Major jewellery brands are partnering with LGD manufacturers to secure supply chains and expand sustainable offerings. With India’s strong export potential and favorable trade agreements, the country is poised to become a key supplier for global luxury brands. 

Redseer helps stakeholders and investors navigate this transformation by providing data-driven insights, strategic advisory, and market intelligence—empowering them to identify growth opportunities and optimize go-to-market strategies in the rapidly growing LGD sector and the broader jewellery industry.