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Crisil Ratings in its latest report has said that India’s natural diamond polishing industry is poised to see a decline in revenue to a decadal low of around $12 billion during the current financial year (FY25). It said that the decline in revenues will be mainly on account of three reasons - muted demand in key export markets of the US and China, a fall in prices due to oversupply and shifts in consumer preference towards lab-grown diamonds due to affordability and high resemblance to the natural ones.

It said the revenues of the natural diamond polishing industry will decline for third fiscal in a row. Being a buyers’ market due to tepid demand and decreasing prices, polishers are limiting their purchases of rough diamonds. Also, miners have cut production helping in the arrest of fall in prices of rough diamonds.

According to the report, sluggish demand in the US market caused a fall in India’s diamond exports, while there is a growing preference for golden jewellery in China as the yellow metal is now being considered as a safer asset providing better returns amid economic uncertainty. In addition to this, the youth population in these key export markets is increasingly embracing lab-grown diamonds as limited disposable incomes are constraining discretionary spending.