It’s an election year in India, and the direction of the economy of the world’s largest democracy is the prevailing theme. Incumbent Narendra Modi and his opponent Mallikarjun Kharge both promise to grow the Indian economy through government spending, which could benefit India’s jewelry industry, one of the world’s largest in revenue, second only to China.

India, a parliamentary democracy, divides its national elections into seven phases, which take place from March 16 to June 4, 2024. It is a system that can seem bewilderingly complex to Americans used to going to the polls on election day, choosing their candidates, and learning the result of the election a couple days later. India is not only the world’s largest democracy, with nearly one billion registered voters; this year’s election will be the largest in history.

As is the case all over the world, these elections take place against a backdrop of economic uncertainty: high inflation, rising costs of living, the ever-present specter of recession, the need to balance economic growth with climate change mitigation, the widening gap between rich and poor. But even amid this uncertainty, there is one sector of the economy that has been strong for  years and will continue to grow for years to come: lab-grown diamond manufacturing.

Lab-Grown Diamond Prices Fell in 2023

Prices of LGD fell throughout 2023 and are forecasted to continue to fall throughout 2024. In some cases, it’s led to a bit of a crisis among sellers of LGD. For others, lower revenue per sale is offset by more overall sales. People who would not have previously been able to afford a diamond are now able to own one. Those who have set aside a budget for, say, a 1ct diamond engagement ring are preferring to put that money into a larger lab-grown diamond ring than simply pay less for a 1ct lab-grown diamond ring.

The drop in LGD price has affected the Indian LGD sector, according to this recent Care Edge Analytics & Advisory report. The report predicts the LGD market to pick back up in 2025 even as price per carat continues to fall due to the depreciation of the rupee and the popularity of LGD among younger consumers. The Indian jewelry industry has a lot riding on the accuracy of this prediction.

The Lab-Grown Diamond Industry in India

In February 2023, the Finance Minister announced a Rs 2.5 billion (about 30 million USD) grant to increase LGD production in India. This grant has led to an expansion of India’s production capabilities, which were already impressive before the announcement. A National Jeweler article from March of that year put India’s LGD production at 1.5 million carats per year. An article from six months later stated that just one LGD manufacturer, Greenlab, boasted an annual capacity of 2 million carats. The growth of the LGD sector has also led to a growth in India’s already large cutting and polishing workforce.

The growth of the LGD sector in India in 2023 drew the attention of The Christian Science Monitor, a publication well-known for its investigative journalism. In their report on the effect the industry has had on the city of Surat, they found mixed opinions among jewelry industry insiders on the ability of LGD to truly transform the industry and the fortunes of the people employed in it. Perhaps as a result of these mixed feelings, manufacturers are leaning into the sustainability story, as National Jeweler pointed out: “solar or wind power…women’s empowerment, energy-efficient processes, and recycling of materials.” If oversupply causes prices to continue to fall, customers may be willing to pay more for a responsibly produced product, if manufacturers can back up their responsibility claims.

India has been synonymous with the finest jewelry and gemstones for millennia. The recent growth of its diamond manufacturing capacity will see the nation extend that reputation into the lab-grown diamond sector. Despite falling prices, India seems poised to reach its goal to become the world’s leading manufacturer of lab-grown diamonds.