India’s gems and jewellery market is poised for robust growth, projected to reach $128 billion by 2029, growing at a CAGR of 9.5%, according to 1Lattice’s latest report, Glimmers of Growth. This surge is driven by rising disposable incomes among the middle class, growing demand for certified and branded jewellery, and increased adoption of digital retail platforms. Gold continues to dominate the market, accounting for 86% of the overall share.

The report noted that government initiatives such as reductions in gold import duties and mandatory hallmarking have boosted consumer confidence and affordability. The rise of online retail, with virtual try-on tools and digital marketing strategies, is reshaping consumer engagement, especially among younger demographics.

Lab-grown diamonds (LGDs) have emerged as a key growth driver within the sector. The Indian LGD market is projected to reach $1.2 billion by 2033, growing at a CAGR of nearly 15%. Exports of LGDs have grown eightfold since FY21, and India now contributes around 15% of global LGD production, the report states. However, the lack of domestic HPHT machine fabrication presents an opportunity for investment to establish a full-fledged supply chain. LGDs are increasingly favoured for their affordability, ethical sourcing, and environmental benefits, aligning well with global ESG goals.

The report also maps major jewellery manufacturing clusters across India, including Surat, Mumbai, Jaipur, Thrissur, and Coimbatore, each specialising in distinct styles and techniques. Consumer preferences vary by region, age, gender, and spending behaviour, with a notable shift towards minimalistic, personalised, and sustainable jewellery.

Despite its promising outlook, the industry faces several challenges, including volatile gold prices, high labour costs, fragmented inventory systems, and the slow adoption of advanced retail technologies. Nonetheless, India’s position as a global leader in both natural and lab-grown diamond processing, supported by favourable policy frameworks and rising international demand, sets the stage for sustained growth, 1Lattice said.

To capitalise on this momentum, the report suggests that industry players should enhance transparency through certification, invest in technology, and tap into global trade opportunities while promoting jewellery as both a fashion statement and a long-term investment.