Natural diamond prices have declined sharply from their 2021 peak, with the average price of a one-carat stone falling 51% to USD 3,898 in 2026 from USD 8,007 in 2021, according to data from Rapaport Group cited by Financial Express.

The correction reflects excess inventory following increased production during the Covid-19 period, alongside weaker demand and competition from laboratory-grown diamonds. The price decline has put pressure on the natural diamond trade, with inventory correction and consumer demand remaining key factors in determining the market’s recovery.

India’s festive season could provide some support to jewellery demand. The report also points to signs of stabilization in natural diamond prices, including in solitaire and smaller-stone categories, alongside resilient demand for studded jewellery.

For manufacturers, traders and retailers, sustained recovery will depend on inventory levels, consumer demand and the balance between supply and sales. While festive buying may improve market sentiment, a broader recovery in natural diamond prices remains contingent on these factors.