Mansi Sharma saw her parents make practical choices throughout their lives, investing in gold and property, things that held value and offered security. Diamonds, however, sat in a different category altogether.

Her mother had come to admire them over the years, shaped by what she saw around her, in films, advertisements, and store windows. To her, diamonds symbolised a visible marker of having moved up in life. So, on their 25th anniversary, Mansi’s father bought her mother a diamond piece. It wasn’t framed as an investment, but as a gesture. Something to mark the journey they had taken together.

Today, the piece is more of a memory than an asset. For Mansi, though, the appeal doesn’t quite translate.

“I see diamonds as symbolic,” she says, “but not something I’d put my money into; I would choose silver instead, something simpler and with assured returns.”

The Inherited Belief in Diamond Value

For decades, diamonds in India carried an assumption of value. They were rarely bought as formal investments, but many still believed they would hold their worth, perhaps even appreciate over time. That belief is now beginning to shift, and the rise of lab-grown diamonds is accelerating that change.

Diamonds aren’t losing their shine so much as their investment pitch. As Indian buyers get more financially literate, the stones are being recast as discretionary luxury rather than a store of value.

According to Wazir Advisors, India’s diamond market is estimated at Rs 53,512 crore (US$ 6.2 billion) in FY25 and is projected to grow to Rs 74,227 crore (US$ 8.2 billion) by FY28, registering a CAGR of 12%. Within this, lab-grown diamonds represent a smaller yet significant segment, valued at around Rs 3,452 crore (US$ 400 million) in FY25 and expected to reach Rs 5,179 crore (US$ 600 million) by FY28, growing at a slightly higher CAGR of 14%.

Globally, the lab-grown diamond market was valued at US$ 29.46 billion in 2025 and is forecast to expand to US$ 91.85 billion by 2034, growing at a CAGR of 13.42%. The Asia Pacific region led this segment with a 34.54% market share in 2025. In comparison, the overall global diamond market stood at US$ 102.06 billion in 2025 and is expected to reach US$ 153.1 billion by 2034, reflecting a CAGR of 4.6%, according to Fortune Business Insights.

The Narrative Shift

As more buyers, especially younger ones, embrace these lower-cost alternatives, the idea of diamonds as scarce, ‘once in a lifetime’ assets is becoming harder to sustain. More financially aware consumers and a sharper investment lens are making a distinction that was always there but seldom questioned: what feels valuable isn’t always financially valuable.

Investment advisors, in particular, have become far more direct on this question. “We generally do not recommend diamonds as a core component of a financial portfolio due to their poor liquidity and unpredictable returns. They are better classified as luxury consumption or lifestyle assets rather than productive investments,” Abhishek Kumar, SEBI RIA and founder of SahajMoney, told The Core.

It is a blunt assessment, but one that reflects a broader shift in how wealth itself is being defined. The belief that jewellery can double as an investment is fading, as investors increasingly turn to options like equities, SIPs, and gold ETFs that are easier to track and sell.

Liquidity And Pricing

At the core of this rethink is a structural issue. Unlike gold, which is priced daily and can be sold almost anywhere with minimal friction, diamonds operate in a far more fragmented ecosystem.

Prices are not standardised, valuations are subjective, and the resale market remains shallow. “Diamonds lack a transparent market price and often involve high markups and transaction costs, making them less effective as a financial hedge,” Kumar said. The gap between purchase price and resale value can be significant, and often comes as a surprise to first-time buyers.

Like market-linked assets, the value of gold fluctuates. This means it offers the potential for capital appreciation, allowing investors to make a profit by selling when market prices exceed their initial purchase cost.

“Typically, when you sell gold, buyers may offer slightly below the prevailing market rate — often around 10% lower, but even then, it remains a far more reliable and liquid option compared to diamonds,” Deepak Shenoy, CEO of Capitalmind Mutual Fund, told The Core.

Diamonds, by contrast, are far more complicated to value. While carat weight matters, factors like cut, clarity, and other subjective qualities influence pricing. The lack of uniform standards makes it difficult to price them consistently or sell them with ease.

For years, this mismatch between perception and reality was softened by culture and marketing. Diamonds were rarely bought with the intention of being sold. They were heirlooms, symbols, emotional anchors. But as financial awareness deepens and consumers become more deliberate about where they put their money, the lack of liquidity is becoming harder to ignore.

Changing Consumer Behaviour

The industry, interestingly, is not pushing back as strongly as one might expect. Instead, it is reframing the conversation.

India remains central to the global diamond ecosystem, contributing nearly 90% of the world’s cut and polished diamonds by volume, as Mehul Jain, founder of Ekaraa, points out. The country is not just a processing hub anymore; it is also an increasingly important consumption market. But the nature of that consumption is changing.

“The diamond market globally is undergoing a structural shift rather than a decline,” Jain told The Core. “Buyers are moving away from seeing diamond jewellery as an ‘investment’ and instead appreciating it as a form of luxury consumption, one that holds emotional, aesthetic, and experiential value.”

The assumption that diamonds should behave like assets is giving way to a more grounded understanding of what they actually are.

This shift is visible in how and why people are buying diamonds. The traditional association with weddings and large, infrequent purchases is loosening. There is a rise in self-purchase, in everyday wear, in smaller, more design-led pieces that are meant to be used rather than stored. Parag Shah, CEO of KISNA Diamond and Gold Jewellery, sees this evolution up close. “Gold and diamonds have historically served different purposes in the Indian consumer mindset, and that distinction continues to hold,” he said.

Instead of spending on high-cost, non-appreciating assets, younger consumers are investing in digital gold, stocks, cryptocurrencies, and other instruments that offer potential returns.

No Longer A Niche

This reflects a broader mindset change: value is increasingly tied to utility and long-term wealth creation rather than purely emotional or cultural appeal.

Part of this change is being accelerated by the emergence of lab-grown diamonds, which have introduced a new layer of complexity into the market.

These stones, identical in composition to natural diamonds but significantly more affordable, are beginning to reshape how value itself is perceived. Jain notes that what was once a niche category is now entering the mainstream.

“Industry estimates suggest that the Indian lab-grown diamond market, currently valued at a few hundred million dollars, could cross US$1 billion over the next decade,” Shah said.

Lab-grown diamonds are no longer a niche or experimental category, but instead are becoming a meaningful part of the fine jewellery conversation in India.

More tellingly, they are not always seen as compromises. “Today’s Indian buyer, especially the urban, well-informed consumer, is far more aware and open to alternatives that align with both value and intent. Lab-grown diamonds are increasingly being seen not as substitutes, but as a conscious choice,” Jain said.

Lab-grown diamonds have the same physical, chemical, and optical properties as natural diamonds, but potentially offer greater accessibility, design flexibility, and a compelling value proposition.

Redefining Affordability And Access

That shift matters because it weakens one of the core pillars that supported the investment narrative: scarcity. If consumers are comfortable choosing alternatives that offer similar aesthetics at lower prices, the idea of diamonds as rare, appreciating assets becomes harder to sustain. Instead, the conversation moves towards design, accessibility, and personal preference.

At the same time, the market itself is expanding, particularly beyond the metros. India’s domestic diamond jewellery segment is steadily growing, driven by rising incomes, urbanisation, and a new wave of first-time buyers.

These consumers are not necessarily entering the category with the same assumptions as previous generations. They are more informed, more price-aware, and often more interested in what a purchase says about them than what it might be worth later. Shah said that Tier 2 and Tier 3 markets have become key growth drivers, with demand rising as aspirations increase and exposure to branded products improves.

There is also a noticeable shift in how affordability is being approached. Rather than focusing solely on price, brands are rethinking value. Lightweight jewellery, smaller carat weights, and a wider range of price points are making diamonds more accessible without positioning them as investments. The emphasis is on wearability and relevance.

Pieces are designed to fit into everyday life, not just special occasions. This has the effect of increasing the frequency of purchase, even if individual transactions are smaller.

What Diamonds Really Offer Today

The Indian diamond industry continues to show strong growth potential, supported by both domestic demand and its role in global supply chains. But the drivers of that growth are different from what they once were. It is less about preserving wealth and more about expressing identity. Perhaps the most significant shift, though, is in the narrative itself.

For decades, diamonds were sold on the idea of forever, not just in an emotional sense, but in a way that blurred into financial dependability. That narrative worked because it aligned with how consumers wanted to think about value. Today, that alignment is weakening. Consumers are asking different questions, and the answers are more grounded.

Diamonds, it turns out, were never really designed to function like gold or equities. They do not have the same liquidity, the same price transparency, or the same ease of exchange. What they do have is something less quantifiable: emotional weight, design appeal, and cultural significance. As long as those qualities matter, diamonds will continue to find buyers.

The difference is that those buyers are now clearer about what they are getting and what they are not.