India’s diamond industry is showing early signs of recovery as renewed consumer interest in natural diamonds emerges from China — a market that had sharply declined in recent years. After witnessing exports to China fall by nearly half between 2021 and 2024, Indian exporters are seeing a modest but encouraging increase in inquiries and trade activity.
The turnaround is being attributed to new retail strategies adopted by leading Chinese jewellery chains, including the rollout of diamond buyback schemes. These programmes offer customers guaranteed value on their purchases, potentially restoring confidence in diamonds as both a luxury and investment item. Retailers in China have reported increased footfall and buyer interest since the schemes were launched.
Between 2021 and 2024, India’s diamond exports to China declined from over $6.5 billion to around $3.3 billion. The fall was driven by a combination of factors — including a consumer shift towards gold, macroeconomic uncertainty, and post-pandemic slowdowns in retail spending. Additional health concerns, such as emerging respiratory viruses, further dampened consumer sentiment.
However, in 2025, the narrative appears to be shifting. Demand for smaller-sized natural diamonds, particularly those used in lightweight or gold-accented jewellery, has stabilised. Industry activity at recent Hong Kong trade shows has indicated renewed buyer interest, particularly among younger, urban consumers.
Indian exporters, who cut and polish over 90% of the world’s diamonds, are cautiously preparing for a possible rebound in demand from China — historically one of their top markets. According to trade organisations, while overall export figures have not yet returned to pre-pandemic levels, there has been a marked slowdown in the rate of decline, and Chinese inquiries are rising.
Traders expect the impact of these shifts to become more visible from the second half of 2025, coinciding with major Chinese wedding and festive seasons. The buyback model — though still in early stages — is viewed as a potentially transformative strategy for restoring consumer trust in natural diamonds, particularly in an era of growing competition from lab-grown alternatives.
That said, significant challenges remain. Global competition for the Chinese market is intensifying, with other exporting nations also focusing on capturing renewed demand. Ongoing economic concerns and changing jewellery preferences — including a shift towards smaller, less expensive stones — may limit the extent of any recovery.
Still, stakeholders see China’s policy changes as a positive development in what has been a difficult few years for the global diamond sector. Other exporting nations, including Belgium, Israel, and several African producers, are also watching China’s evolving market conditions closely, hoping for broader ripple effects.
While the outlook remains tentative, there is growing consensus that the worst may be behind the natural diamond trade. The industry is now entering a phase of cautious recovery, with India well positioned to benefit if momentum continues into the year-end buying season.
