The Global Diamond Landscape -

The diamond industry plays a crucial role in global trade, with a market size valued at USD 101.03 billion in 2024, projected to grow to USD 129.53 billion by 2033 at a CAGR of 2.8%, according to Straits Research. Diamonds are not only prized for their aesthetic appeal but also used in industrial applications due to their hardness and thermal conductivity.

Within this landscape, China stands as the world's second-largest diamond market, valued at approximately USD 8.8 billion in 2022 Statista, making it a critical player for global exporters, including India.

Current State of China's Diamond Market -

China's diamond market has faced significant challenges in recent years, driven by economic slowdown and a decline in marriage rates, which traditionally fuel diamond demand. Reports indicate that demand for diamonds in China dropped by up to 50% over the past two years, with wholesale prices falling by about 40% Business Standard. This downturn created a chilling effect on the market, valued at around USD 9 billion, with 2024 revenue at USD 5.7 billion, expected to grow to USD 7.2 billion by 2030 The Economic Times.

Despite these challenges, early signs of recovery are emerging, as noted by industry leaders. The Hong Kong International Diamond, Gem & Pearl Show, held earlier this month, marked the first positive event in four to five years, with steady sales and inquiries from diverse global markets, including China Times of India. This resurgence is attributed to stabilizing diamond prices and renewed Chinese interest, particularly in smaller diamonds.

The State of China’s Diamond Market: Challenges and Shifts -

Economic Slowdown and Demographic Pressures -

China’s diamond market, valued at $9 billion, faced a double blow from its economic deceleration (2023 GDP growth: 5.2%, down from pre-pandemic averages) and plummeting marriage rates (6.8 million weddings in 2022 vs. 13.5 million in 2013). These factors suppressed demand for luxury goods like diamond engagement rings.

Find out more about China’s economic trends in the World Bank China Overview.

The United Nations Population Fund tracks marriage rate declines in East Asia.

Early Signs of Recovery -

Despite challenges, GJEPC notes stabilizing diamond prices and renewed interest in smaller stones (below 10 points). Retailers are integrating diamonds as accents in gold jewelry rather than standalone pieces.

The International Monetary Fund (IMF) discusses China’s consumption rebound.

India’s Diamond Export Crisis -

India’s gem and jewellery exports fell by 23.49% YoY in February 2024, with demand slumping in the U.S. and China. The GJEPC reported exports of

2.42billion(₹21,085crore),downfrom2.42billion(₹21,085crore),downfrom3.17 billion in February 2023.

Export Data: Insights into India’s trade statistics via the Ministry of Commerce and Industry.

The U.S. Market Slowdown -

The U.S., India’s largest diamond buyer, saw a 15% drop in bridal jewellery sales in 2023 due to inflationary pressures.

The U.S. Bureau of Economic Analysis tracks shifts in luxury spending.

GJEPC’s Strategic Moves -Trade Through Hong Kong

To counter declining exports, GJEPC spearheaded India’s participation in the Hong Kong International Diamond, Gem & Pearl Show (DGP), featuring 71 exhibitors across 116 booths. The pavilion highlighted:

Loose Diamonds: Emphasizing smaller, affordable stones.

Lab-Grown Diamonds (LGDs): Catering to eco-conscious buyers.

Fine Jewellery: Bridging traditional craftsmanship with modern designs.

Hong Kong accounts for 12% of India’s gem and jewellery exports. The DGP show strengthened ties with Chinese buyers prioritizing quality and smaller carat stones.

Trade Insights: The Hong Kong Trade Development Council offers market analysis for luxury goods.

The Rise of Smaller Diamonds - A Manufacturing Shift

A pivot toward smaller diamonds (below 0.10 carats) as Chinese buyers favor subtlety over ostentation. This trend aligns with India’s strength in precision cutting for petite stones.

The Indian Institute of Technology (Bombay) studies advanced diamond-cutting technologies.

While GJEPC calls this shift a “reset,” emerging markets like Vietnam, Brazil, and Cambodia are driving demand for larger stones (3+ carats), offering India a diversified buyer base.

Emerging Markets: The World Trade Organization (WTO) tracks global trade patterns.

Lab-Grown Diamonds -

Lab-grown diamonds (LGDs), which constitute 18% of India’s gem exports, are gaining traction in China for their affordability and sustainability.

A 2023 study by Stanford University confirms LGDs generate 85% fewer carbon emissions than mined diamonds.

The World Diamond Council reports a 35% YoY increase in LGD sales.

Global Opportunities Beyond China -

The Middle East and Southeast Asia -

UAE and Southeast Asian markets are embracing larger diamonds for high-net-worth clients. Venus Jewel’s Devansh Shah noted increased inquiries for 3-carat round brilliants at the Hong Kong show.

Luxury Trends: The Bain & Company Luxury Report highlights regional growth hotspots.

European buyers prioritize ethically sourced stones, aligning with India’s push for Responsible Jewellery Council (RJC) certifications.

Learn about RJC protocols at ResponsibleJewellery.com.

Strategies for Indian Exporters -

Diversify Markets: Target growth regions like Southeast Asia and Latin America.

Invest in LGDs: Expand production to meet eco-conscious demand.

Adopt AI for precision cutting and inventory management.

Conclusion -

China’s tentative recovery and the global shift toward smaller, sustainable diamonds present both challenges and opportunities for India. By aligning with ethical practices, innovating in lab-grown technology, and diversifying exports, India can reclaim its position as the world’s diamond powerhouse.