Lab-grown diamonds (LGDs) are going to take over the next half of this decade, hopefully crossing the share of natural diamonds in a few decades. With natural diamond prices at an all-time low and increasing accessibility of LGDs, Indians are taking an increased interest in the diamond fashion jewellery segment. India’s LGD market is valued at almost $300MN (source: CNBC TV18) currently (!) and set to grow at a CAGR of ~15% in the coming 10 years. The Government has also abolished a 5% tax on imports of diamond seeds, used in the manufacture of LGDs, further strengthening the sector’s outlook. The below chart shows the Google search volumes of LGDs in India for the past 5 years with a clear upward trend since early 2023.

Fashion jewellery such as tennis bracelets, solitaire studs and diamond rings are being heavily marketed to young consumers through social media. Every other influencer has a tennis bracelet stacked with their watch and calls it an ‘everyday jewellery essential’. With India’s growing disposable income, currently estimated at ₹2.14L per capita by the Government, increasing participation of women in the workforce and the power of celebrity endorsements, young women are becoming more interested in owning and flaunting diamond jewellery.

Another interesting development is Swarovski launching LGD jewellery last year, and broadening their India focus. With the rising affordability and supply of LGDs, Swarovski stands to lose a sizable customer base who would prefer paying slightly more and opting for diamonds instead. We are seeing similar behaviour across Indian retailers as well with Senco and Trent foraying into this sector and Giva’s newer offerings. Is Pome, Trent’s LGD line, going to become the fast-fashion of fine jewellery?

The industry is slowly moving away from the phrase ‘lab grown’ to just ‘grown’ as is clear from Aukera’s change in branding. ‘Lab grown’ carries the risk of making the diamonds seem artificial or fake, much like lab-grown meat. This move is possibly to educate wary customers about the authenticity of the product, and we might see a further shift in consumer preferences towards the more affordable product.

I am very excited to see how the sector shapes up and whether more traditional retailers adopt LGDs. Always looking out for lucrative investable opportunities so I can fund my next (grown) diamond purchase!