From Commodity to Category: The Lab-Grown Diamond Opportunity in India

India now produces 30 to 40% of the world’s lab-grown diamonds, with industrial-scale reactors operating across Surat and Jaipur, making India the global hub for LGD manufacturing.

Hi there!

This week on Eximius Echo, we explore a sparkling shift in India’s jewellery landscape: the rise of lab-grown diamonds (LGDs) from commodity to category. Once a niche alternative, LGDs are now reshaping how young Indians buy, wear, and think about jewellery—with affordability, design, and self-expression at the forefront.

While natural diamonds have long been tied to legacy, investment, and tradition, LGDs are carving out their own lane—as fashion-forward, fast-moving consumer products. And with India emerging as a global manufacturing hub, both D2C and wholesale opportunities are accelerating.

If you’re new here, Eximius is a pre-seed VC fund backing bold ideas in fintech, AI/SaaS, and consumer tech. We use this newsletter to share insights, trends, and ideas from the sectors we’re passionate about. Let’s dive in.

Lab-grown diamonds (LGDs) are real diamonds created in a controlled lab environment using high-pressure, high-temperature (HPHT) or chemical vapour deposition (CVD) methods. They have the same physical, chemical, and optical properties as natural diamonds. The key difference is origin; LGDs are man-made, while natural diamonds form over billions of years underground. LGDs are certified by the same gem labs as mined diamonds.

Supply Has Surged. Demand Is Catching Up.

India now produces 30 to 40% of the world’s lab-grown diamonds, with industrial-scale reactors operating across Surat and Jaipur. The supply story is clear: falling input costs, widespread adoption of CVD technology, and high-quality polishing have made India the global hub for LGD manufacturing.

However, domestic demand has not kept pace. While exports continue to grow, local consumption remains fragmented. The production ecosystem is fully built, but consumer adoption is still early. This disconnect stems from a fundamental divide in how Indian consumers perceive jewellery.

Prices Have Dropped, but the Real Signal is in the Mid-Band

Lab-grown diamond prices have fallen by nearly 75% since 2016, led by dramatic declines in the 0.5 to 1 carat range. A 2-carat LGD today costs around ₹2 lakh, while a 6-carat version is just about twice that. Natural diamonds in the same range still cost 5-8x.

This price compression has made LGDs more accessible, especially for younger, first-time buyers. Notably, the same 0.3 to 1 carat range where LGD volumes have grown fastest is also the only size band where natural diamond prices have softened in the past year. It suggests that LGDs are directly influencing pricing pressure in the lower-carat natural segment, undermining the investment logic for traditional buyers.

At the same time, prices for LGDs above 1 carat have begun to stabilise, but not in a way that suggests renewed value. Rather, supply constraints and rising input costs have simply slowed the pace of decline. Still, most of the volume remains in the 0.5 to 1.5 carat zone, which continues to be the sweet spot for everyday, design-led jewellery.

For this reason, larger LGDs may be better suited to wholesale and export channels, where buyers seek size over story. But for D2C brands targeting under ₹50k price points, the sub-1.5 carat segment offers both scale and relevance.

They are a fast-moving consumer category, built on design, affordability, and brand pull. A retail play focused on ₹10k to ₹40k statement pieces makes strategic sense. On the supply side, jewellers benefit from high-turn SKUs, not bulky, slow-moving stock.

LGDs are no longer a niche experiment. They are now central to how modern, mid-ticket jewellery is being discovered, bought, and worn.

LGDs Are Fashion Jewellery, Not Financial Assets

Natural diamonds from platforms like CaratLane start at ₹10,000 and come with buyback options, helping retain value over time. LGDs typically depreciate by up to 70% in five years (if you buy something for ₹100 today, 5 years later the value would be around ₹30).

Yet, for the younger segment, this does not matter. Their benchmark is not CaratLane. It is Swarovski, which sells high-design jewellery with no resale assurance. Swarovski clocks over ₹400 crore in annual revenue in India, despite never pitching its jewellery as an asset. The LGD category must embrace this model: brand, emotion, and design over scarcity or resale.

Business Models That Work

Indian jewellery buyers fall into two distinct camps, both significant in size but only one expanding rapidly.

The Store-of-Value Buyer: This consumer treats jewellery like an asset. They purchase from trusted legacy names such as Tanishq or long-standing family jewellers. What matters most is the gold weight, certification, design and buyback policy. These are typically wedding buyers or family gift purchasers who prioritise resale and long-term holding.

The Self-Expression Buyer: This is the 25 to 35-year-old urban consumer who views jewellery as a fashion statement. For them, a ring or bracelet functions like streetwear or seasonal accessories. They are comfortable spending ₹10k to ₹40k on a design-led piece, fully aware that it may never be resold. They value uniqueness, convenience, and personal style over investment logic.

This second cohort is expanding rapidly. In 2024, over 60% of new LGD purchases in India were driven by this younger, style-forward segment. They are reshaping the category, shifting it away from legacy perceptions of value and towards modern, design-led consumption. The future of the Indian LGD market will be defined by how effectively brands cater to this self-expression buyer. Conversion of legacy customers will be slow, but the new generation is already buying.

We conclude that at a higher price, people are buying it for the commodity/jewel, and lower price, people are buying it for the brand. Thus, a brand can be built for the segment.

Alongside this shift, wholesale is also gaining momentum. Retailers and wedding jewellers are increasingly bundling LGDs with gold to optimise price points and margins. At the same time, B2B buyers across fashion, lifestyle, and luxury segments are sourcing LGDs as input materials for accessories, watches, and handbags. These buyers are not looking for a brand, but for quality, consistency, and reliable supply, making this a strong channel for wholesalers.

Both of these have been detailed, founders must pick a lane:

What Defines an Investable LGD Brand

The strongest LGD businesses operate with sharp discipline and clear brand thinking. They maintain CAC below ₹7k while building a user base with over 50% repeat rate in the first year (like fashion jewellery brands), or margins have to be higher to break even with the customer as close to the first purchase.

Their products command a visible premium over commodity-grade LGDs due to stronger design, packaging, or storytelling. They are active across both online and offline channels in India’s top ten cities, which not only drives reach but also builds trust. On the supply side, they reduce dependence on external vendors through vertical integration or exclusive tie-ups, improving cost control and margins. This combination of customer economics and operational clarity creates a defensible moat, especially in a category that lacks resale-driven stickiness.

We also see strong investability in wholesale-focused businesses that cater to larger brands, the wedding ecosystem, and B2B accessory buyers. With the pricing gap between natural and lab-grown diamonds widening, these businesses do not require a consumer-facing store. Their CAC remains low, often driven by repeat orders and word of mouth, while their ability to deliver quality, scale, and fulfilment speed makes them critical infrastructure for the category.

The LGD Gold Rush Will Reward Focused Builders

The market is still early. The real winners will not be the loudest marketers, but the clearest operators; founders who know their consumer, control their unit economics, and move with strategic intent.

This is not a play for generalists. Either build a brand with emotional equity and repeat behaviour, or build a supply chain that wins on cost and throughput. Doing both will dilute the outcome.

For investors, the opportunity is not theoretical. It is here. But it lies with businesses that have clarity of ambition, strength of execution, and the restraint to ignore vanity scale.

---

If you are looking to build in this space, we would love to chat! Please reach out to us at pitches@eximiusvc.com.