Editor’s Note
A new report highlights a significant shift in the global diamond trade. Exports of cut and polished diamonds have fallen to a two-decade low, pressured by economic headwinds and a notable consumer pivot toward more affordable lab-grown alternatives. This trend underscores the evolving dynamics within the luxury goods market.
According to ICRA’s report, CPD exports fell to a 20-year low of USD 13.3 billion in FY2025. This is impacted by the global macroeconomic slowdown and growing consumer preference for cheaper LGDs. LGDs now constitute 8% of polished diamond exports, up from just 1% in FY2019.
Additionally, the recent imposition of a 27% tariff by the US is likely to cause losses for India. The US is a major market, accounting for over one-third of India’s CPD exports. Although this has currently been halted with a 10% interim tariff, exporters remain concerned.
The report stated that the operating profit margin for CPD firms has declined by 400 basis points to around 4% in FY2025. Meanwhile, ICRA estimates a further decline to 3.6-3.7% in FY2026.
Meanwhile, FY2025 saw a sharp decline of 8% in rough diamond prices and 7% in polished diamond prices. However, miners like De Beers expect rough diamond prices to remain within a limited range due to production cuts. ICRA believes the diamond industry’s credit profile may remain weak in the near future.