Demand Surge For Lab-Grown Diamonds A Silver Lining For Artisans Grappling With US Tariffs

Employers ask workers and artisans to cut short their Diwali vacation as the demand for lab-grown diamonds surges in both domestic and export markets. Despite the US tariff, the Indian diamond industry continues to thrive

Oct 30, 2025 · 4 min read

Diamond, US tariff, Diwali, gems industry, jewellery, GJEPC, Surat, lab-grown diamonds, Gujarat

“Normally, our Diwali vacation is for 15 to 20 days. This year, we were told that the vacation will be for only seven days,” says Madadiya, who has been working as a diamond artisan for more than a decade.

Yet, Madadiya is not complaining.

When the US imposed a whopping tariff of 50 per cent in August on India, fear had gripped more than 1.3 million artisans engaged with the country’s diamond industry. The US has been India’s key export market for gems and jewellery. Besides, many are indirectly engaged with the industry.

Many had warned of massive job cuts.

That was then.

Today, the diamond industry is buzzing.

Why?

A Boon In Disguise

Lab-grown diamonds – significantly cheaper compared to natural diamonds – have come as a boon in disguise. The demand for lab-grown diamonds has surged.

In fact, the share of natural diamonds as a percentage of total demand for this precious stone, often known as a woman's best friend, is rapidly falling. Several of these diamond merchants have started roping in celebrities to endorse the value of natural diamonds.

In terms of price, a lab-grown diamond is at least 10 per cent cheaper compared to a natural diamond. So, diamond jewellers and industrialists can buy lab-grown diamonds in multiples at the cost of a single natural diamond of an equivalent carat.

If the craze was for natural diamonds 15 years ago, today, nearly 80 per cent of the precious stone is lab-grown. Moreover, close to 80 per cent of companies have either completely shifted or diversified to lab-grown diamonds.

Impact On Industry

Indian diamond traders and jewellery makers have also managed to rapidly diversify the export markets.

The skills for cutting and polishing are the same as those required for natural diamonds; so, workers have no bottlenecks in making a shift, and their work pressure has, in fact, increased. “The export market is well-diversified. These are exported to the West Asian nations, Europe, China, and other countries, in addition to the US. So, we are not overtly dependent on the US. Exports are nearly doubling year-on-year,” Smit Patel, director, Surat-based Green Lab Diamonds, tells The Secretariat. His company employs almost 6,000 workers directly – most of them have rejoined, shortening their vacation.

The Time magazine, in an article, said, “The lab-grown diamond (LGD) is at the heart of India’s bid to become a global leader in producing the synthetic alternative, which has a much smaller carbon footprint than mined diamonds, and is seen as conflict-free.”

“These are affordable, carry no risk [of getting looted or cheated], and are certified as well. Some sellers also offer a buyback at 100 per cent value. The way this segment is growing, it is likely to multiply in the next five years,” Haresh Narola, vice-president, Lab Grown Diamond Association, points out.

India’s Gems And Jewellery Exports

According to Gems and Jewellery Export Promotion Council (GJEPC), India’s exports of gems and jewellery in the first half of the current fiscal (April–September 2025) stood at $14.09 billion, as compared to $13.60 billion in the same period last year, indicating a growth of 3.66 per cent.

Industry players said that while the volume has fallen, the rise is attributed to the increase in the cost of metals such as gold and silver. The previous year saw close to 36 per cent rise in average gold prices, while silver shot up by 42 per cent. These factors, along with lab-grown diamonds almost replacing natural diamonds, nullified the likely impact of 50 per cent additional tariffs imposed by the US recently.

The GJEPC’s report reveals that exports of cut and diamonds to the US declined 53 per cent to US $ 1175.09 million, as compared to the same period in the previous year.

Outbound Shipments To The UAE

However, outbound shipments to the UAE shot up 65.23 per cent to $1,299.71 million, reflecting Dubai’s growing role as a global trading hub for diamonds.

Also, exports to Hong Kong increased by 18.08 per cent, touching $2,057.02 million. Export of polished lab-grown diamonds declined relatively mildly by 7.99 per cent, to $586.63 million.

Plain gold jewellery exports surged 46.74 per cent to $2.80 billion, buoyed by rising gold prices and strong orders from the West Asian market. Silver jewellery exports, too, posted a 17.43 per cent rise to $596.41 million. Platinum jewellery exports climbed 25.37 per cent to $106.54 million, reflecting growing global consumer interest in diversified precious metals.