Why diamond prices are crashing and what it means for India

Natural diamond prices have fallen to levels not seen in more than two decades, with wholesale prices now around 30-40% below their 2021 peaks, according to a recent market report carried by TradingView.

The diamond is set to be auctioned in October. (Pexels)The drop comes as the diamond industry faces lesser demand in key markets, elevated inventories and growing competition from lab-grown diamonds. The fall has not been uniform, with smaller and lower-quality natural diamonds under greater pressure than larger, higher-quality stones.

Demand for natural diamonds has softened in some major markets. De Beers said rough diamond trading conditions remained challenging in the first half of 2026, with geopolitical and macroeconomic uncertainty affecting consumer confidence and logistics.

Demand in mainland China continued to decline, while India remained robust. In the US, natural diamond jewellery sales returned to growth among independent jewellers.

De Beers' H1 2026 results show the pressure further up the supply chain. Its rough diamond production rose 46% year-on-year to 14.9 million carats, while total revenue fell to $1.6 billion from $2 billion a year earlier.

The company's average realised rough diamond price fell 32% to $105 per carat from $155 per carat in the first half of 2025. Its average rough diamond price index also declined 16%.

Lower realised price reflected a sales mix with a higher proportion of lower-value goods because of its inventory mix, along with the decline in its rough diamond price index.

The rapid expansion of lab-grown diamonds has added another source of pressure, particularly for smaller and lower-value natural stones.

Lab-grown diamonds have the same crystal structure as natural diamonds but can be produced at scale, allowing them to be sold at substantially lower prices. De Beers said smaller and lower-quality natural diamonds continued to face pricing pressure from synthetic lab-grown diamonds in the first half of 2026.

Lab-grown prices have also fallen sharply as production has increased. Diamond industry analyst Edahn Golan told Reuters in October 2025 that average wholesale prices of one-and two-carat lab-grown diamonds had fallen by as much as 96% since 2018. Reuters reported that increased production in China and India had contributed to the decline.

The global slowdown matters particularly for India, which processes about 90% of the world's diamonds and is the world's largest cutting and polishing hub, according to Reuters.

India's cut and polished diamond exports fell 8.5% year-on-year to $12.16 billion in FY2025-26, their lowest level in more than two decades, Reuters reported, citing the Gem and Jewellery Export Promotion Council.

Overall, gems and jewellery exports fell 3.3% to $27.72 billion during the financial year. Shipments to the US, India's biggest market, fell 45% to $5.09 billion, Reuters reported.

The weaker export numbers reflect the pressure facing India's diamond-processing industry as global demand changes and lab-grown stones gain a larger share of the market.

Krithika Iyer is a Senior Content Producer with the Explainer Desk at Hindustan Times, bringing a deep passion for rigorous, accessible journalism to every story. With a strong drive for breaking down complex topics, Krithika focuses on clear narratives that answer the critical questions of why stories matter and what happens next. Before joining Hindustan Times, she worked with the Reuters Dotcom team, navigating fast-paced global news environments with precision and speed, mainly covering US legal news. Krithika holds a Master's degree from the University of Westminster, combining rigorous academic grounding with international newsroom experience. Deeply curious and endlessly adaptable, Krithika loves exploring new beats and learning continuously, believing that growth comes from trying one's hand at everything. Outside the newsroom, she is an avid reader who also enjoys experimenting with cooking and expressing creativity through art as a way to unwind. Bringing curiosity, sharp editorial insight, and a commitment to clarity, Krithika continues to shape compelling digital narratives that resonate with audiences across platforms.Read More