India Diamond Cutting & Polishing Market Explosion: Key Drivers, Emerging Trends, and Competitive Forecast

Market Overview

India has long held a reputation as the global hub for diamond cutting and polishing. The country processes over 90% of the world’s diamonds by volume, largely centered in Gujarat, with Surat recognized as the industry’s nerve center. The Indian diamond industry is primarily export-oriented, serving markets across North America, Europe, and Asia-Pacific.

According to the research report published by Polaris Market Research, the global India diamond cutting and polishing market was valued at USD 18.69 billion in 2021 and is expected to reach USD 25.25 billion by 2030, to grow at a CAGR of 3.4% during the forecast period.

Key Market Growth Drivers

1. Technological Modernization

The Indian diamond cutting and polishing sector is undergoing rapid digitalization. The incorporation of laser-based cutting systems, 3D modeling, and automated diamond grading tools has greatly improved precision, minimized material waste, and accelerated production cycles. These innovations not only meet the growing demands of international clients but also elevate India’s global reputation for consistency and quality in gemstone processing.

2. Surge in Polished Diamond Demand

Rising affluence and luxury spending in emerging markets—particularly China, the Middle East, and Southeast Asia—have catalyzed demand for finely cut diamonds. India, with its scalable and skilled infrastructure, is well-positioned to meet this rising appetite for polished diamond exports. Additionally, increased interest in custom and bridal jewelry has opened new channels for high-value diamond trade.

3. Integration with Jewelry Manufacturing

The convergence of diamond cutting with the broader jewelry manufacturing ecosystem has streamlined operations and minimized logistical challenges. Many cutting facilities are now either vertically integrated or have established strategic partnerships with jewelry manufacturers, improving speed to market and customer responsiveness. This holistic approach has enhanced India’s competitiveness against other global diamond hubs.

4. Government Support and SEZs

Government initiatives such as duty drawbacks, subsidies for technology upgrades, and the development of Special Economic Zones (SEZs) have significantly boosted the sector. Incentives aimed at promoting exports and infrastructure development in Surat, Mumbai, and other key regions continue to attract new investments in the industry.

Market Challenges

Despite its resilience, the diamond cutting and polishing industry in India is not without challenges.

1. Fluctuating Rough Diamond Supply

The availability and pricing of rough diamonds remain volatile due to geopolitical instability, changes in mining outputs, and shifting trade regulations. Disruptions in the supply chain often cause delays, price hikes, and capacity underutilization, especially among small and mid-sized enterprises.

2. Labor-Intensive Processes Amidst Automation

While automation has gained traction, a significant portion of the industry still relies on manual operations. The transition to a more digitized workflow presents challenges in terms of workforce training, capital investment, and change management.

3. Ethical Sourcing and Sustainability

Increasing global scrutiny over ethical sourcing practices and environmental sustainability has placed pressure on the Indian diamond sector to maintain transparency and adhere to responsible sourcing standards. Compliance with frameworks such as the Kimberley Process and carbon-neutral certification requires ongoing investment and oversight.

4. Currency Fluctuations and Export Risks

As a predominantly export-driven industry, fluctuations in the value of the Indian rupee can influence profitability. Additionally, shifts in trade policy or tariffs in key export markets can impact demand and margins.

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Regional Analysis

1. Gujarat: The Epicenter of Activity

Gujarat, particularly Surat, remains the heart of the Indian diamond industry. Home to thousands of small, medium, and large units, Surat leads in both traditional craftsmanship and advanced diamond processing technologies. The city benefits from dedicated infrastructure, skilled labor, and strong backward integration with jewelry manufacturers.

2. Maharashtra: Strategic Trade and Innovation Hub

Mumbai serves as a vital commercial node, housing leading trading houses, diamond bourses, and financial institutions. The city plays a crucial role in coordinating exports, accessing international markets, and piloting new innovations in blockchain-based traceability and quality assurance.

3. Rajasthan and Tamil Nadu: Emerging Centers

Other regions such as Jaipur and Coimbatore are emerging as niche hubs for colored stones and specialized gemstone processing. These centers are supported by government initiatives to promote local craftsmanship and employment.

Export Landscape and International Presence

India’s polished diamond exports are predominantly directed toward the United States, Europe, and Hong Kong. These regions account for a significant share of revenue due to strong consumer preferences for certified and precision-cut diamonds. In recent years, India has diversified its export markets by targeting emerging economies with growing middle-class populations and increasing taste for luxury.

India also plays a critical role in global supply chain realignment, especially as manufacturers and retailers seek more transparent and agile sourcing options. Blockchain-enabled platforms for verifying origin, quality, and compliance have made Indian exporters more attractive to international buyers seeking traceability and authenticity.

Key Companies and Industry Leaders

The diamond cutting and polishing market in India comprises a blend of well-established conglomerates and agile small-to-medium enterprises (SMEs). These companies are characterized by strong export capabilities, high-precision production methods, and a commitment to sustainability.

Many firms are investing heavily in R&D to further advance automated diamond grading, reduce environmental footprint, and develop proprietary cutting techniques. Others are integrating forward into jewelry retail or backward into rough diamond procurement to control quality across the value chain. Strategic partnerships, digital certifications, and omnichannel distribution are becoming common themes among leading players.

Future Outlook

The India diamond cutting and polishing market is expected to maintain steady growth through the next decade, with a strong emphasis on sustainability, traceability, and customization. Several trends are set to shape the industry's trajectory:

• AI and Machine Learning: Continued investment in AI for stone mapping, grading, and flaw detection will transform productivity and reduce human error.

• Sustainable Manufacturing: Pressure to adopt low-energy laser equipment, waste reduction systems, and eco-friendly packaging will define competitive positioning.

• Skill Development: Training programs and certifications in digital tools, blockchain integration, and quality control will bridge the gap between traditional craftsmanship and modern requirements.

• Global Collaborations: Joint ventures with international jewelry brands and mining companies will expand market access and stabilize rough diamond supply.

Conclusion

India’s diamond cutting and polishing industry stands at a critical inflection point. While the sector boasts a rich heritage and global dominance, it must continuously adapt to shifting consumer expectations, ethical demands, and technological disruptions. The successful integration of digital innovation with traditional expertise offers a promising path forward, ensuring that India retains its crown in the global gemstone processing industry.

With strong institutional support, a growing pool of talent, and a legacy of excellence, India is poised to not only sustain its leadership but to redefine the future of the global diamond trade.