India has now taken over China as the world's second-largest market for diamonds. This, according to Al Cook, CEO of UK-based diamond giant De Beers Group, shows that India has double-digit growth while China's demand is dropping.

Soaring demand for diamonds in India

In conversation with Bloomberg, Cook pointed out how India has developed into a miraculous growth story for the diamond segment.

“The good news is that India has taken over where China was, and India is now the second-largest market in the world for diamonds, and that's growing at double-digit rates,” he stated. 

Demand is growing with double-digit figures, which shows the fact that India is the growing market with an increasing taste for luxury items.

Why is China's luxury market slowing down?

China's economic downturn has affected its luxury industry, including diamond demand. Cook observed that demand in China's luxury market declined because of slower economic growth, and he believes that it will take time to recover.

“Across the luxury sector in China, demand has declined as Chinese economic growth has faltered somewhat. Now we see that as a rather longer-term issue,” he explained.

While he remains optimistic about a gradual recovery, he acknowledged that stabilization is the first step before any potential resurgence. 

"The first thing we'll see is stabilisation of Chinese demand, which is coming through at the moment. But quite honestly, we see the regrowth of Chinese demand being a rather longer-term story," Cook added.

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Domestic market fuels India's growth

India's cut and polished diamond exports declined as demand decreased in the United States and China, although India is still witnessing a rapid rise in its domestic markets. 

According to Reuters, "India's rising domestic demand has been the key driver in its strengthening position in the global diamond trade." This means that India is gradually adjusting to global market changes by boosting its domestic intake.

Lab-grown diamonds: A growing challenge?

Though India's natural diamond market is thriving, lab-grown diamonds have been a challenge, especially in the United States. Cook recognized this trend, saying it affects demand for natural diamonds. 

"Demand in the United States has been reduced by lab-grown diamonds. So we've got to take that on and tell the story of natural diamonds far better than we have," he said.

Drawing a striking analogy, he compared lab-grown diamonds to replicas of famous artwork. 

"You know, lab-grown diamonds. They are their thing, but it's a little bit like buying a poster of the Mona Lisa and putting it up in an art gallery, telling people it's the real thing.". 

A natural diamond is created over a billion years under the earth, whereas a lab-grown diamond is created in a microwave in China in three weeks."

India's role in the changing diamond industry

With India gaining prominence in the diamond sector, industry analysts predict that it will play an increasingly influential role in shaping global trends. De Beers is focusing on highlighting the authenticity and legacy of natural diamonds to navigate the competitive landscape created by lab-grown alternatives.

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