Lab-Grown Diamonds Gain Traction in India's Tier-2 and Tier-3 Cities

Lab-grown diamonds (LGDs) are gaining significant traction in India's tier-2 and tier-3 cities, as a widening price gap with natural diamonds and rising gold prices push aspirational consumers toward more affordable jewellery options. This shift mirrors trends in the US, where LGDs have moved from niche to mainstream, particularly in engagement jewellery.

## Price Advantage and Market Share

The price discount on LGDs compared to natural diamonds has expanded to as much as 90% this year, up from about 70% in 2025. A carat of premium-quality LGD now costs between Rs 50,000 and Rs 80,000, while a carat of natural diamond ranges from Rs 2.0 lakh to Rs 3.5 lakh. LGDs currently account for nearly 10% of India's Rs 80,000 crore diamond market.

| Price Comparison | LGD (per carat) | Natural Diamond (per carat) | |---|---|---| | Premium Quality | Rs 50,000-80,000 | Rs 2.0-3.5 lakh |

## Regional and Demographic Trends

The adoption of LGDs is particularly strong in North and South India, with West India also seeing growing interest. Consumers aged 25-45 are the primary buyers. Pooja Madhavan, founder and managing director of Limelight Lab Grown Diamonds, noted that tier-2 and emerging markets are becoming key growth drivers. The sharp rise in gold prices has encouraged consumers to seek better value in terms of size, design, and price.

Madhavan highlighted that the shift is not solely price-driven but also reflects greater awareness, improved accessibility, and evolving attitudes toward luxury among younger consumers. Vaibhav Karnavat, founder of House of Quadri, added that LGDs offer the same physical, chemical, and optical characteristics as natural diamonds, making them an increasingly compelling value proposition.

## Manufacturing and Expansion

India has become a major manufacturing hub for LGDs, producing around 20 million carats annually. This growing supply base supports expanding demand. Limelight Lab Grown Diamonds, for instance, has around 80 stores in 45 cities and plans to exceed 100 stores by 2026. Key growth markets include Pune, Indore, Jaipur, Lucknow, Surat, Nagpur, Hyderabad, Bengaluru, and Chennai.

The trend in India mirrors the US market, where LGDs have transitioned from a niche alternative to a mainstream choice in engagement jewellery. The affordability and ability to purchase larger stones for the same budget are driving this shift, offering insights into the potential trajectory of the category in India.