Natural diamond prices have surged by 10% in the past two months, and industry executives expect prices to remain firm throughout 2025, supported by increasing consumer interest across key markets such as the US, Europe, China, West Asia and India.

While prices vary by cut, carat, colour and clarity, the average price of a good quality rock now hovers around ₹5 lakh per carat, up from ₹4.5 lakh in early January, industry executives said. The price of the most used diamond has shot up to ₹3 lakh from ₹2.7 lakh, they said.

"The demand in India has been growing, but now the global markets are showing rising interest for the rock. Prices of certain qualities of diamonds are already up by 10%," said Amit Pratihari, managing director of De Beers India. "Prices will remain firm in 2025."

De Beers, one of the largest diamond brands in the world, expects consumption in India to surge 15-20% this calendar year. The demand will mostly be in the smaller size diamonds, whose price have already gone up by 6% in the last two months, Pratihari said. "Solitaires are more preferred in the urban centres as the consumers in these regions have already acquired small stones," he said.

The trade has reported increasing demand from tier-2 and -3 cities in the country. In FY24, the Indian gems and jewellery market stood at $85 billion, with diamond jewellery at $8.5 billion.

"Natural diamonds are experiencing a comeback, driven by a resurgence in consumer confidence in the luxury segment," said Dinesh Lakhani, global director at Kiran Gems, the largest manufacturer of natural diamonds in the world. "In addition to this renewed interest, prompt action by diamond manufacturers in controlling inventory levels has played a key role in the revival of natural diamond demand," he added.

Despite the recent uptick, diamond prices remain significantly below their all-time high of about $6,819 (about ₹5.85 lakh at Thursday's exchange rate) per carat for good quality rock in early 2022, amid the post-pandemic 'revenge spending'. Since then, there had been a slump in demand amid a global slowdown and a change in consumer preferences with some opting for lab-grown diamonds.

The rebound in demand has led to increased activity in Surat, the hub of the global diamond cutting and polishing industry. The industry's 800,000-strong workforce is demanding a salary hike, citing wage cuts last year amid a slowdown in sales.

"Now, we are seeing early signs of recovery with a good uptick for smaller diamonds. It is time that our salaries be increased and a proper annual increment system put in place," said Bhavesh Tank, vice-president, Diamond Workers Union.

Courtesy: ET