Lab-grown diamond exports expected to rise by 7-9% in FY25: Report

Lab-grown diamond exports are expected to increase by 7-9 per cent to $1,500-1,530 million in the fiscal year 2024-25, as per a report by CareEdge Advisory released on Monday. The surge is attributed to the sluggish demand for naturally mined diamonds, prompting both domestic consumption and exports of man-made diamonds to rise due to their affordability.

Tanvi Shah, Director of CareEdge Analytics and Advisory, stated, "The LGD (lab-grown diamonds) exports are expected to witness a revival with expected growth of 7-9 per cent to reach $1,500-1,530 million in FY25. Faced with ongoing geopolitical and economic disruptions globally, the gems and jewellery industry is relying on the rapidly growing LGD market to mitigate the effects of low demand for natural diamonds."

The report highlights a recent decline in LGD exports, experiencing a year-on-year decrease of approximately 16.5 per cent in FY24, primarily due to declining prices despite growing volumes. However, the depreciating rupee is anticipated to provide a cushion for the industry.

Looking ahead, the demand for LGD is poised to revive in FY25, fuelled by sluggish demand for naturally mined diamonds. This trend is attributed to factors such as price point, environmental sustainability, and increased competition from India against other leading LGD-producing nations.

India currently produces over three million lab-grown diamonds annually, accounting for 15 per cent of global production, making it the second-largest producer after China. Noteworthy LGD manufacturers include the US, Singapore, and Russia.

In 2022, the Indian market for lab-grown diamond jewellery was valued at $264.5 million, with the domestic market expected to reach $300 million.

The declining price of LGD in recent times has impacted India's exports to key destinations, with exports witnessing a decline of 16.5 per cent from $1,680.22 million in FY23 to $1,402.30 million in FY24, as per the CareEdge Analytics report.

(With PTI inputs)