Editor’s Note
This analysis explores Dubai’s strategic move to become a hub for lab-grown diamonds, highlighting their expanding role beyond jewellery into high-tech industries.
Dubai is positioning itself to capitalise on the rise in lab-grown diamonds, which are gaining traction not only as jewellery and industrial applications but as components in high-end technology.
The emirate, where government figures show diamond trade at the end of 2023 sported five-year compound annual growth of 11 percent, could also attract manufacturers as US President Donald Trump’s 50 percent tariff on Indian exports encourages producers to seek alternative bases.
Sales and prices of natural diamonds – mined primarily in Africa, then cut and polished mostly in India – have been falling, partly as a result of the rising popularity of their lab-grown equivalents.
Dubai, which local authorities estimate to have traded $40 billion of diamonds in 2024, is working to remain “nimble, shifting as market dynamics change”, according to Paul Zimnisky, who runs a data analytics and consulting company.
According to figures from DMCC, home of the Dubai Diamond Exchange, about $1.6 billion of lab-grown diamonds were sold through the emirate in 2023.
Jewellery and industrial applications have driven the growth of this segment so far, says Ahmed bin Sulayem, DMCC executive chairman and CEO. But the real potential is in advanced technology.
Peterfreund says the emirate’s central location, financial infrastructure and ease of doing business give it outsized appeal as a trading hub.
Experts, however, are divided on how the competition between lab-grown and natural diamonds will shape the industry’s future.
Some believe young, environmentally and ethically conscious consumers will fully embrace the cheaper and cleaner synthetic stones, which are identical in colour and purity to their traditional peers. Others predict they will displace only lower-quality gems, leaving the luxury segment untouched.
What happens will determine how much longer and steeper the decline in natural-diamond sales and prices will be, or whether the industry will turn a corner.
De Beers Group, which is majority-owned by British mining giant Anglo American and among the top suppliers in the world, reported “difficult” conditions for the wholesale rough and polished diamond business in the first half of 2025, though it found overall demand for diamond jewellery “broadly stable”.
From January to June, the company’s production of rough diamonds sank 23 percent year on year while sales declined 13 percent as the average price of unpolished stones fell 14 percent, according to De Beers’ interim results released on July 31.
As the White House subjects Indian products to a 50 percent tariff – with diamond imports into the US taxed based on their origin, not their last point of departure – the UAE’s own 10 percent rate could over time convince manufacturers from the South Asian nation to relocate some operations to Dubai, says Espeka’s Peterfreund.