India’s lab-grown diamond (LGD) sector is pushing back against aggressive discounting as shrinking margins squeeze manufacturers and erode industry profitability. At a September 7 meeting of the Surat Lab Grown Diamond Association, leadership urged traders and brokers to enforce price floors and eliminate undercutting.

Raw Price Shift: Polished LGD prices recently rebounded by 20% to 25%.

Discount Compression: In response to rising costs, traders scaled back buyer discounts from ~7% to a tighter 3%–4% range.

Margin Squeeze: Association President Babu Vaghani warned that uncontrolled discounting directly erodes manufacturer earnings, forcing wage cuts and destabilizing supply chain economics.

Industry Outlook

The sector faces a structural dilemma: lower consumer prices drive adoption, but severe price erosion starves manufacturers, polishers, and labor of viable margins.

Continued downward pressure is pushing skilled labor out of the market and forcing polishing units to explore alternative industries. Stabilization hinges on widespread compliance with pricing discipline across the Surat hub.