Coloured diamonds are captivating the ultra-wealthy, with an increasing number of affluent individuals in India opting for striking pink, blue, and yellow diamonds. These unique gems are not only regarded as eye-catching pieces of jewelry but also as valuable long-term investments.
Unlike their traditional white counterparts, which are more common, coloured diamonds are exceptionally rare and have seen a notable surge in demand—rising 20% to 25% in just the past year, even as prices continue to climb. Reports indicate that since the onset of the pandemic, India has emerged as one of the fastest-growing markets for these precious stones. This trend is largely driven by a new generation of ultra high net-worth individuals (HNIs) who are globally minded and keen on diversifying their assets.
It's crucial to understand the stark contrast in pricing between conventional and coloured diamonds. For example, while traditional white diamonds usually sell for between Rs 1 lakh and Rs 7 lakh per carat based on their cut and clarity, coloured diamonds command a much higher price. Pink diamonds can fetch anywhere from Rs 15 lakh to an astonishing Rs 5 crore per carat, with blue diamonds priced similarly at Rs 25 lakh to Rs 5 crore. On the other hand, yellow diamonds present a more accessible entry point into this market, available at prices ranging from Rs 5 lakh to Rs 15 lakh per carat.
But what exactly is fueling the growing shine of these gems?
While their aesthetic appeal certainly plays a role, the potential for price appreciation is a significant factor in driving demand. With no new mines expected to open, coloured diamonds are increasingly seen as alternative investments due to their rising scarcity. Over the past two decades, the value of pink diamonds has skyrocketed tenfold, whereas blue diamonds have experienced a six to sevenfold increase in price. Yellow diamonds have also appreciated significantly, roughly doubling in value during the same timeframe. Darshit Hirani, co-founder of P Hirani Exports, explains that the popularity of coloured diamonds is further bolstered by celebrities and influential business figures worldwide who are now choosing these gems for weddings and special events. "Wealthy Indians are eager to partake in this global phenomenon," he remarked. Interestingly, interest in coloured diamonds isn't confined to major metropolitan areas; there’s a notable trend of HNIs in tier II cities beginning to invest in these rare stones, often starting with yellow diamonds.
Hirani, who has specialized in coloured diamonds for over four decades, points out that purchasing trends vary by age group. Typically, buyers aged 45 and older tend to purchase larger stones weighing one to two carats, while younger buyers from affluent backgrounds are attracted to smaller and mid-sized options. Retailers have also observed shifts in consumer behavior following the pandemic. Ishu Datwani, the founder of Anmol Jewellers in Mumbai, notes that spending on rare gemstones has surged since Covid.
"Indians have become avid travelers, gaining exposure to luxury jewelry brands like Chopard and Cartier. They now expect us to create pieces that align with their refined tastes," Datwani stated. He also mentioned a marked increase in demand for fancy yellow diamonds, which are sourced in their rough form from countries like Australia, Russia, and South Africa before being expertly cut and polished in Surat.
On a global scale, coloured diamonds are proving to be star performers at auctions, especially in Asia, where their rarity and investment potential have made them incredibly desirable.
A report released in July by the Natural Diamond Council (NDC) estimated that the wholesale value of fancy coloured diamonds entering the market in 2024 would surpass $4.5 billion, according to data from the Israel-based Fancy Colour Research Foundation (FCRF). Industry leaders estimate that coloured diamonds comprise less than 1% of the total global diamond production, with only a handful of mines producing them in limited quantities. The closure of Rio Tinto's Argyle mine in 2020, which was responsible for over 90% of the world's pink and red diamonds, has further restricted supply. With no consistent alternative sources emerging, dealers report that scarcity has intensified, leading buyers to compete aggressively for the remaining inventory, often at any price.
