Whalesbook
Industry Faces Longest Slump in 60 Years
India's diamond industry is in its deepest and longest downturn in 60 years. Govind Dholakia, a prominent industry figure, Rajya Sabha MP, and Founder-Chairman Emeritus of Shree Ramkrishna Exports Pvt Ltd (SRK), calls it an unprecedented reset, largely due to the disruptive rise of lab-grown diamonds.
Dholakia noted, "A business flourishing for 60 years has slowed down. This is the first time the slowdown has lasted over four years." This lengthy slump is far longer than previous downturns, which usually resolved in two to four months.
Exports Plunge Amid Downturn
Official data from the Gem & Jewellery Export Promotion Council (GJEPC) confirms the sharp decline. India's exports of cut and polished diamonds fell to $12.16 billion in FY26, down nearly 50% from a peak of $24.24 billion in FY22. The latest fiscal year saw exports drop 8.52% from the prior year, with volumes decreasing 3.85% to 160.04 lakh carats.
Lab-Grown Diamonds Fuel Market Confusion
Dholakia points to market confusion when lab-grown diamonds first emerged as the main driver. "When lab-grown diamonds arrived, clients buying natural diamonds became confused about whether to continue with natural or switch," he explained. This uncertainty led to delayed purchases and reduced demand for natural diamonds, while steady supply caused prices to fall sharply.
He also revealed that some lab-grown diamonds were initially mislabeled as natural, a practice Dholakia, with 62 years in the sector, strongly condemns. Despite this, he sees lab-grown diamonds as a potential market expander, not just a threat.
Recovery Signs Emerge Amid Geopolitical Worries
Dholakia expresses optimism for a gradual recovery, even with global uncertainties like the Iran war. "The slowdown will not last long," he asserted, noting growing clarity between natural and lab-grown diamonds. He reflected on consumer choice: "If it is my daughter's wedding, will I purchase a lab grown diamond or a real one?"
Early signs of stabilization are appearing. The premium segment is improving, with prices for diamonds weighing 3 to 5 carats increasing by 10%. The industry remains a major employer, offering monthly salaries between ₹50,000 and ₹2 lakh for high school graduates.