The diamond market in Panna, known for producing high-quality diamonds through small-scale mining, is facing significant challenges.
A substantial volume of diamonds recovered from the district remains unsold following recent government-run auctions. The market downturn is attributed to a slump in global diamond demand and increasing competition from lab-grown diamonds.
Market Pressures: Lab-Grown Diamonds and Geopolitical Factors
Two major factors are reducing the demand for natural diamonds from Panna. First, lab-grown diamonds, which are significantly cheaper, are being increasingly used in jewellery. Lab-grown stones cost between ₹15,000 and ₹20,000 per carat, compared to ₹2.5–3 lakh for natural diamonds, contributing to their growing market share.
Second, geopolitical instability, including conflicts such as the Russia-Ukraine war and tensions in Israel and Palestine, has disrupted international trade. Panna diamonds, which traditionally reach markets in the United States, Israel, and Russia via Surat in Gujarat, now face reduced international demand. Local traders report that buyers from Gujarat and other major centres are reluctant to purchase and, when they do, seek steep discounts.
Implications for the Jewellery Industry
Geopolitical tensions have disrupted traditional supply chains, affecting the flow of Panna diamonds to international markets. For jewellers, this highlights the need to adapt to changing market dynamics and consider strategies to address shifting consumer preferences.