For India’s diamond industry that has weathered wars, recessions and cyclical shocks, the current downturn stands apart. Calling it the most prolonged and severe crisis in six decades, Govind Dholakia, Rajya Sabha MP from Gujarat (BJP) and Founder-Chairman Emeritus of Surat-based Shree Ramkrishna Exports Pvt Ltd, said the global diamond trade is in the middle of an unprecedented reset, triggered in part by the disruptive entry of lab-grown diamonds.
“There has been a tremendous impact on the diamond industry. A business which had been flourishing for the last 60 years, has slowed down. Earlier, too, slowdowns have happened, but they have lasted for two to four months. This is the first time the slowdown has extended over 4 years,” Dholakia said during an interaction at the company’s facility in Surat.
Data from the Gem & Jewellery Export Promotion Council (GJEPC) underscores the scale of this downturn. India’s cut and polished diamond exports in FY26 stood at $12.16 billion — nearly 50 per cent lower than the FY22 peak of $24.24 billion, marking one of the sharpest contractions in the industry’s history. On a year-on-year basis, exports declined 8.52 per cent in FY26, while volumes fell 3.85 per cent to 160.04 lakh carats.
Spoilt for choice
At the heart of the disruption, Dholakia points to a period of confusion that hit the market when lab-grown diamonds first gained traction. “The slowdown can be traced to the lab-grown diamonds. When these lab-grown diamonds first came in, the clients of natural diamonds became confused whether to continue buying natural or shift to lab grown. This confusion not only delayed purchases but also lowered the demand for natural diamonds. While the demand reduced, the supply remained the same and this caused prices to crash,” he said.
“When lab grown diamonds were introduced into the market, a number of them sold them as real diamonds,” said Dholakia, adding that he has been associated with the diamond industry for the last 62 years.
Yet, even as he describes the disruption, Dholakia does not see lab-grown diamonds purely as a threat — but as a force that could ultimately expand the market. “Till date only 0.25 per cent of the people in the world used to buy real diamonds, the lab grown can be used by 25 per cent. It is a 100-fold growth,” he said.
Still, the recovery remains vulnerable to global uncertainties, with fresh geopolitical tensions weighing on sentiment. “Six months ago we all thought that the diamond business would grow by 20 per cent by Diwali. But now the Iran war has happened and what can we do about it?” Dholakia said.
Gradual recovery
Even so, he remains confident that the structural confusion triggered by lab-grown diamonds is beginning to ease, paving the way for a gradual recovery. “The slowdown will not last long. Now there are clear differentiators between how lab-grown and natural diamonds. If it is my daughter’s wedding, will I purchase a lab grown diamond or a real one?,” said Dholakia, reflecting on shifting consumer clarity.
Early signs of stabilisation, he noted, are already visible in the diamond market, with the premium segment showing signs of improvement. “We are already seeing green shoots. The prices of diamonds ranging between 3 and 5 karats have risen by 10 per cent,” he added.
Recalling his own journey, Dholakia added that he would have continued to be a farmer had he not migrated to Surat and entered the diamond trade. “I have studied only till 7th grade,” he said, emphasising that the industry continues to offer employment opportunities to school and high school pass-outs, with monthly salaries ranging between ₹50,000 and ₹2 lakh.
Published on April 22, 2026