The diamond industry is facing an uncertain future, and the year 2026 has already been a wild ride. With global political and economic turbulence, the industry's recovery from a prolonged slump is at stake. As we navigate these unpredictable times, here are seven key trends that could shape the diamond market's destiny.
The Uneven Recovery: A Tale of Two Markets
While diamond demand increased in the top two markets, the United States and India, in 2025, the recovery is far from uniform. There are significant variations across different segments. The high-end retail market is thriving, but the midstream picture is more complex, with three distinct segments showing varied performance.
Russell Mehta, managing director of Rosy Blue India, highlights the stability and price firming up for larger goods (above 2-3 carats). Smaller goods (below 0.18 carats) have also seen some improvement, indicating a horizon of stability. However, the mid-tier segment, ranging from 20 points to 2 carats, remains challenging, with subdued demand in China and synthetic diamonds gaining a substantial market share in the U.S.
Tariffs, Sanctions, and Trade Deals: A Complex Web
Tariffs have been a rollercoaster, impacting the trade of rough and polished diamonds. While concerns over Russian diamond sanctions took a back seat in 2025, tariffs and trade negotiations, particularly between India and the U.S., dominated the discourse. The industry breathed a sigh of relief when it seemed an agreement was near, exempting natural diamonds and gemstones from tariffs. However, the relief was short-lived, as tariffs returned and will remain at 10% (possibly increasing to 15%) for the foreseeable future. Indian diamantaires are now focusing on smaller boosts from trade deals with the U.K., E.U., Oman, Australia, and others.
Supply-Side Equilibrium: Miners and Midstream's Role
A delicate balance between supply and demand seems to be returning to the diamond pipeline. Industry analyst Pranay Narvekar believes this equilibrium is due to controlled supply rather than rising demand. Rough diamond production is now significantly below past peaks, predicted to stabilize around 100 million carats for the next few years. Major mining companies have reduced their guidance, and smaller mines have either shut down or are on maintenance. The midstream has also restructured, with overall capacity well below the post-COVID peaks of 2022. Many smaller players have shifted to cutting lab-grown diamonds or exited the sector due to the prolonged downturn.
A Marketing Blitz for Natural Diamonds
The Luanda Accord on generic marketing for natural diamonds marked a turning point for the industry. Shaunak Parikh, vice chairman of India's Gem & Jewellery Export Promotion Council (GJEPC), believes it signaled the start of a new phase. Governments of mining countries and organizations from the midstream are joining hands with the Natural Diamond Council to boost generic promotion. The NDC is expected to launch a marketing blitz in key markets during the major selling seasons of 2026. In India, sustained marketing campaigns by De Beers Group, Titan, and GJEPC, supported by smaller retailers, have already had a positive impact, with diamond jewelry sales on track to almost double by 2030.
Governments' Growing Role: Beneficiation and Beyond
The role of governments in the diamond industry has steadily grown since the advent of beneficiation a couple of decades ago. Now, in addition to marketing natural diamonds, there is a possibility of a dramatic turn with a coalition of diamond mining countries emerging as new owners or majority stakeholders in De Beers. Anglo American, De Beers' parent company, confirmed in 2024 that it was looking to sell its stake as part of a restructuring to focus on green energy. The final outcome of this sale remains to be seen, but it could significantly alter supply-side dynamics. India, heading the Kimberely Process this year, envisions new possibilities for the chain of custody mechanism, aiming to create awareness and boost consumer confidence.
Lab-Grown Diamonds: Has the Peak Passed?
The wave of lab-grown diamonds that competed fiercely with natural diamonds seems to have reached its peak. Wholesale prices have declined drastically over the past two years, and growth has leveled out, with retailers needing to sell larger volumes to maintain profits. An industry insider predicts that more sales of lab-grown diamonds will migrate to large chains over the next few years as U.S. retailers feel the pinch. Industry analyst Narvekar believes the lab-grown diamond segment is approaching an inflection point as price drops impact retail margins. A recent report from Tenoris shows a decline in unit sales of loose lab-grown diamonds in January, potentially signaling a transition to a more mature phase.
Artificial Intelligence: Impacting Offices, Not Just Factories
A wide range of diamantaires believe that the current AI wave is having a greater impact on their offices than their factories. Vinit Jogani of Diatech.AI agrees that the loose diamond segment has seen the greatest impact in business planning and trading layers, with AI-driven pricing intelligence, inventory optimization, and demand/supply analytics in daily use. Jogani predicts that the future impact of Generative AI (GenAI) could be felt in manufacturing planning, particularly in yield optimization and plan selection. Currently, the immediate impact of GenAI is seen in the jewelry segment, with potential future applications in mining and rough manufacturing, which have longer adoption cycles.
