India’s diamond export industry is beginning to show signs of a turnaround, fueled by a renewed appetite for natural diamonds in China — a market that had seen a sharp downturn in recent years. After exports to China dropped from over $6.5 billion in 2021 to around $3.3 billion by 2024, Indian traders are now witnessing a modest but encouraging uptick in inquiries and deals.

This positive shift is being largely attributed to innovative retail strategies adopted by leading Chinese jewellery chains, particularly diamond buyback programs that promise customers guaranteed resale value. These initiatives appear to be restoring consumer trust in diamonds as both luxury items and viable investments. Retailers have reported increased foot traffic and renewed interest since the programs were launched.

Between 2021 and 2024, the slump in Indian diamond exports to China was driven by multiple factors — including a pivot toward gold jewellery, broader economic uncertainty, reduced post-pandemic retail activity, and intermittent health crises. However, 2025 is bringing a cautiously optimistic outlook.

Demand is stabilizing, particularly for smaller, natural diamonds often used in lightweight or gold-accented designs. Trade fairs in Hong Kong this year have reflected this shift, with growing interest among young, urban Chinese buyers.

India, which cuts and polishes more than 90% of the world’s diamonds, is preparing for a potential rebound. While overall exports remain below pre-pandemic levels, the pace of decline has slowed, and trade associations report a notable rise in inquiries from Chinese buyers.

Industry players anticipate a more visible impact by the second half of 2025, aligning with China’s traditional wedding and festive buying seasons. The buyback schemes, still in their infancy, are seen as a game-changer that could help the natural diamond industry regain lost ground — especially as lab-grown alternatives gain popularity.

Nevertheless, challenges persist. Other global exporters are also targeting the recovering Chinese market, increasing competition. Additionally, shifting consumer tastes toward smaller, lower-cost stones may limit the scale of recovery.

Despite the hurdles, the policy and retail shifts in China are being welcomed across the global diamond sector. Key exporting nations such as Belgium, Israel, and African producers are closely monitoring the Chinese market for signs of sustained recovery.

While the road ahead remains uncertain, there is a growing belief that the worst may be over for the natural diamond trade. As the year progresses, India is positioned to capitalize on any resurgence in Chinese demand, especially if momentum carries into the critical year-end shopping period.