The global natural diamond market is entering a period of tighter supply as miners reduce production and rough diamond availability declines. The shift comes after several years of weak demand, elevated inventories and pressure on polished prices.
For India, the development is significant as the country accounts for about 90% of global rough diamond cutting and polishing by volume. Any sustained change in rough availability and pricing is likely to have a direct impact on manufacturing costs, inventory decisions and polished exports.
India’s rough diamond imports have already declined sharply. Total rough imports fell 16% year-on-year to $7.1 billion in the first half of 2026, while direct imports from Russia declined 62% to $106 million. Imports from the UAE, Hong Kong and other trading centres have increasingly shaped the country’s rough supply mix.
The supply contraction follows a prolonged period of price correction. ICRA reported that rough diamond prices declined 8% in FY2025, while miners were expected to reduce production as part of efforts to bring supply closer to market demand. Polished diamond prices also fell 7% during the year.
Recent market indicators suggest some improvement in selected natural diamond categories. De Beers said natural diamond prices remain 20–30% below post-pandemic highs, although larger stones, particularly those above two carats, have started to see price increases.
For Indian manufacturers, the emerging supply environment could improve inventory discipline and support pricing in specific categories, but demand remains the key variable. Competition from lab-grown diamonds continues, with LGDs exceeding natural diamonds in India’s export volumes in March and April 2026.
The market therefore faces a contrasting outlook: tighter natural rough supply could provide price support, while manufacturers and retailers will continue to assess consumer demand, category-level margins and the growing presence of lab-grown diamonds.
