Why Are Diamond and Gold Sales Surging Among First-Time Buyers?
About the Diamond and Jewellery Market
The Indian diamond and jewellery market is one of the largest globally, contributing significantly to exports and domestic sales. Key industry bodies like the Natural Diamond Council (NDC) and retailers such as Vummidi Bangaru Jewellers are driving trends in consumer behavior, product quality, and market expansion. With record-high gold prices, there is a noticeable shift among first-time buyers from gold to diamonds, particularly in the sub ₹2 lakh category.
Rising Demand Among First-Time Buyers
Richa Singh, MD of NDC, stated that tier-2 and tier-3 cities in Tamil Nadu—including Coimbatore, Erode, Salem, Tirumachi, Krishnagiri, and Dharmapuri—are seeing a surge in first-time diamond buyers. Many of these buyers, mainly Gen Z, prefer flawless diamonds over gold, reflecting a shift toward investment in precious stones amid soaring gold prices.
Impact of Rising Gold Prices on Diamond Sales
With gold prices reaching record highs, consumers are opting for diamonds as both an alternative investment and luxury purchase. Diamond sales are projected to grow 18-20% in 2025 compared to 2024, led by demand in South India and the sub ₹2 lakh segment. In Chennai, first-time buyers are increasingly entering the market, enhancing overall retail activity.
Standards and Grading Improvements
The Bureau of Indian Standards (BIS), in collaboration with NDC, has issued guidelines for diamond terminology and grading standards for polished jewellery. This ensures transparency and boosts consumer confidence. Jewellery shops across India now offer BIS-certified products, particularly for 9-carat gold, improving trust and facilitating sales growth.
Regional Trends and Market Growth
Demand is particularly high in South India, where consumers prioritize high-quality diamonds. Traders in North India are adopting BIS hallmarking for 9-carat gold to support diamond-studded jewellery sales. Despite US-imposed tariffs, domestic demand remains strong due to rising disposable income and preference for durable, investment-grade jewellery.
Exports and Global Market Influence
India contributes 40-50% of global finished diamond exports. Although tariffs by the US present challenges, the domestic market absorbs these through robust consumer demand. Diamond prices have been rising about 3% year-on-year, indicating healthy market dynamics for domestic sales and exports.
Investor Takeaway
For investors and traders, the rise in diamond and gold-studded jewellery sales highlights growth opportunities in retail and export segments. Traders navigating this phase can use:
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Conclusion
The Indian diamond and gold jewellery market is experiencing a transformation. First-time buyers, especially in tier-2 and tier-3 cities, are driving growth amid high gold prices. BIS standards and rising consumer awareness ensure both domestic and export segments are poised for sustainable expansion, creating opportunities for traders, retailers, and investors.
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