Lab-Grown Diamond Exports expected to Rise 7-9% in FY25

The exports of Lab-grown Diamonds (LGDs) are anticipated to experience a resurgence in FY25, with an expected growth rate of 7-9%, as per a report by to a report by CareEdge Advisory. This growth is projected to propel exports to a value range of approximately US$1500-1530 million.

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The lab-grown diamond (LGD) industry is poised for a resurgence in the fiscal year 2025, with exports anticipated to grow by 7-9%, reaching an estimated value of approximately US$1500-1530 million, as forecasted by CareEdge Advisory. Recent years have witnessed a decline in LGD exports, experiencing a year-on-year decrease of about 16.5% for the fiscal year 2024. Despite an increase in sales volume, diminishing prices have impacted export figures. However, the depreciating value of the rupee is expected to offer some relief to the industry, according to projections by CareEdge Advisory.

Moving forward, the demand for LGD exports is expected to rebound in the fiscal year 2025, as demand for naturally mined diamonds remains subdued. This shift can be attributed to several factors including price competitiveness, environmental sustainability concerns, and heightened competition from India compared to other major LGD-producing countries. Tanvi Shah, Director at CareEdge Analytics and Advisory, expressed optimism, stating, “The LGD exports are expected to witness a revival with expected growth of 7-9% to reach ~US$1500-1530 million in FY25. Faced with ongoing geopolitical and economic disruptions globally, the gems & jewellery industry is relying on the rapidly growing LGD market to mitigate the effects of low demand for natural diamonds. Due to low cost of man-made diamond, domestic consumption and exports are expected to increase in this fiscal.”

India currently produces over three million lab-grown diamonds annually and accounts for 15% of global production, making it the second-largest producer behind China. Additionally, countries such as the United States, Singapore, and Russia are significant players in the LGD market. In 2022, the Indian market for lab-grown diamond jewelry was valued at US$264.5 million, with an expected increase to $300 million in 2023. However, the industry has faced challenges, including a surge in supply leading to a notable drop in prices.

The India-UAE Comprehensive Economic Partnership Agreement (CEPA) is poised to further stimulate growth in the LGD industry. Notably, Finance Minister Nirmala Sitharaman, in the Budget for 2023-24, announced a reduction in basic customs duty on seeds used to manufacture LGD from 5% to NIL, aiming to bolster LGD exports from India amid diminishing natural diamond reserves. Additionally, the depreciating rupee is anticipated to provide a cushion for this export-dependent sector.

Furthermore, the production of high-quality lab-grown diamonds with certified authenticity, utilizing advanced equipment and precise process parameters, is expected to attract more foreign consumers, thereby rejuvenating the export business. Similar to the challenges faced by the Cut and Polished Diamonds (CPD) sector, the declining prices of LGDs in recent times have contributed to a decrease in India’s LGD exports to key destinations. Export figures have declined by 16.5%, dropping from US$1680.22 million in FY23 to US$1402.30 million in FY24.