India's gems and jewellery sector projected to reach $128 billion by 2029

Gold continues to dominate the market with an 86 per cent share, but lab-grown diamonds (LGDs) are emerging as a powerful growth catalyst, said the report by 1Lattice.

The LGD segment, currently valued at $345 million (2024), is projected to grow at a CAGR of 15 per cent to reach $1.2 billion by 2033.

India now contributes 15 per cent of global LGD production, with exports growing 8 times over the past four years, reaching $1.3 billion in FY24.

"India's gems and jewellery market is evolving rapidly at the intersection of heritage and innovation. The rise of lab-grown diamonds, powered by digital commerce, affordability and sustainability consciousness, is reshaping the future of jewellery retail," said Ashish Dhir, Senior Director-Consumer and Retail, 1Lattice.

Key drivers of this market expansion include rising disposable income among India's middle class, fuelling demand for luxury and investment-grade jewellery, branded and certified jewellery gaining traction, driving organised retail and consumer trust, digital transformation led by e-commerce, virtual try-ons, and AI-powered personalisation, with online sales projected to comprise 10 per cent of total jewellery sales.

Other drivers are government interventions, including a 5 per cent duty cut on LGD seeds and a $30 million research grant to boost domestic LGD manufacturing capabilities and sustainability and customisation as top consumer priorities, especially among Gen Z and Millennials, reshaping product preferences and brand loyalties, the report noted.

The report highlighted the industrial potential of LGDs across sectors like semiconductors, aerospace, and optics, though India currently lacks domestic HPHT (High-Pressure, High-Temperature) machine fabrication, pointing to a significant white-space opportunity for investors and tech players.