The Diamond Disruption: What’s Fueling India’s Next $1B Consumer Category
Mrigank Gutgutia
Conscious consumerism is ‘in’ in luxury markets. Statement pieces on the Met Gala red carpet are coming not from a mine, but from a lab. Lab-grown diamonds (LGDs) are the fastest-growing segment in the global gems and jewellery market, with their share expected to rise from 3-4% to 6% from 2024 to 2029. At this rate, LGD growth could outpace the market growth of natural diamonds and gold jewellery by two to three times.
Several factors are driving up LGD jewellery adoption among consumers. Consumer awareness is skyrocketing, with global interest in “lab-grown diamonds” having quintupled in just four years. Consumers who prioritise sustainability and value are both aware and curious to explore. For brands, this is an opening to cater to new, untapped segments. They are deploying omnichannel strategies, bringing in a mix of physical store presence and digital awareness creation through influencer marketing and celebrity endorsements.
Certification agencies are contributing to growing buyer trust. Institutions like the International Gemological Institute (IGI) are authenticating lab-grown stones, helping brands and buyers make credible choices.
The US Story: Rise, Correction & Opportunity
The US, which makes up nearly 70% of the total market, is the largest consumer of LGD jewellery. The US LGD market witnessed tremendous growth between 2019 and 2022. During this period, India’s exports to the US grew nearly 14-fold, accompanied by the rise of several venture capital-backed D2C brands. However, the continuous price decline and a piling inventory have since led the US market to begin a phase of consolidation. A few large players hit by shrinking margins and falling prices have been snapped up by bigger jewellery brands. Others are pivoting toward industrial applications like semiconductors.
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Investors, brands, and disruptors are betting big in India’s LGD market
While India is the world’s diamond polishing hub, its domestic retail market for lab-grown diamonds is still nascent. It stood at ~$300 Mn in 2024, and is expected to grow two to four times by 2030.
Younger buyers are propelling the demand, embracing lab-grown diamonds for daily wear, gifting, and special occasions. Thanks to this pull, India is transitioning from a cutting-and-polishing hub to a full-stack ecosystem, developing production, branding, and retail capacities.
Government initiatives such as R&D funding and seed duty exemptions also play a significant role in improving the supply ecosystem. The market is witnessing the entry of dedicated lab-grown diamond brands and greater participation from legacy jewellery players, enhancing consumer trust and improving conversion. Over $20+ million has already flowed into three homegrown, pure-play LGD brands, mainly to encourage offline retail expansion and build vertically integrated operations.
Youth-Led, Digitally-Discovered, Trust-Driven: The New Diamond Market Playbook
Earlier this month, we surveyed consumers across age groups to understand their buying behaviour and preferences around lab-grown and natural diamonds. With LGDs becoming more visible in the market, the goal was to uncover who is buying them, how they are being purchased, and what’s holding back others from considering them.
- Who is buying?
Younger consumers (18-35 years), often value-conscious, are warming up to lab-grown diamonds, with many making them their first purchase in the fine jewellery segment. However, consumers aged over 35 remain firmly loyal to natural diamonds. Only 39% of respondents in this group reported ever owning LGD, compared to nearly ~50% younger consumers, highlighting a clear generational shift.
- Where are they buying?
~ 48% of respondents who had purchased lab-grown diamonds did so through online branded platforms. This implies that LGD is perceived as a more formalised category compared to the broader fine jewellery segment, which is highly unorganised. Unlike traditional jewellery buyers, LGD consumers are actively bypassing local, unorganised players in favour of trusted, assurance-backed channels. Awareness is also being driven online, with social media emerging as the leading discovery platform, followed by word-of-mouth through friends and family.
- We also asked non-users why they haven’t bought LGDs yet.
Among non-users, lack of awareness was the top reason, followed by negative perceptions from family and friends. Trust in quality and concerns around resale value were mentioned by a smaller share.
Redseer Recommendation for Brands:
To unlock the full potential of India’s lab-grown diamond (LGD) market, brands must evolve beyond just product availability; they need to lead the conversation. This means investing deeply in consumer education to demystify LGDs, proactively shaping narratives of trust, leveraging influencers and celebrity endorsements, and building an omnichannel presence that mirrors the digital-first habits of younger consumers.
Awareness campaigns should also be built around addressing emotional barriers, family perceptions, and resale myths. Brands should build trust through certification, storytelling, and transparency, helping consumers feel confident in their choices. Finally, distribution should reflect how today’s consumers shop: fluidly across online platforms and offline touchpoints with high transparency and trust.
Another move brands should make is to invest in the future by creating awareness in tier-2 and tier-3 cities that will potentially drive future growth.
Brands that act now and adopt a digital-first omnichannel approach will not just grow category adoption – they’ll define it.
Redseer Recommendation for Investors:
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 capitalise on high-margin, scalable ventures. Major jewellery brands are partnering with LGD manufacturers to secure supply chains and expand sustainable offerings. With India’s control over the diamond value chain from growing to polishing to manufacturing, India’s LGD sector is poised to grow.
At Redseer, “We Solve for the New Growth Equation”, enabling stakeholders and investors to unlock strategic clarity in fast-moving landscapes, through data-driven insights, strategic advisory, and market intelligence—empowering them to identify growth opportunities and optimise go-to-market strategies in the rapidly growing LGD sector and the broader jewellery industry.