Will South India’s gold economy make room for lab-grown diamonds?

South India has long been India’s most culturally entrenched gold stronghold. From temple jewellery traditions in Chennai to wedding-led bulk purchases in Kochi and rising tech-driven discretionary spends in Bengaluru, gold in the South is savings, status, inheritance and security embedded into household economics.

Yet, even in this gold-first ecosystem, a visible shift is underway. Over the past two years, a growing number of lab-grown diamond (LGD) brands, both national and regional, have expanded aggressively across southern markets, opening stores, strengthening omnichannel playbooks and investing in targeted digital campaigns. The push has clearly raised a key question whether in a region where gold dominates culturally and financially, are consumers beginning to meaningfully adopt lab-grown diamonds, or is this still an urban niche experiment? 

Reinforcing the region’s gold-first bias, a spokesperson from Bhima Gold noted, “South India has always had a strong emotional and cultural connection with gold, especially when it comes to weddings and long-term investments. Even today, gold continues to dominate bridal jewellery purchases across cities like Bengaluru, Chennai and Hyderabad. That said, consumer preferences are slowly evolving. Diamonds have become increasingly popular for engagement rings, contemporary bridal pieces and occasion-led jewellery. Lab-grown diamonds are still at an early stage in terms of adoption and people who understand the value of real diamond rarely look at laboratory-grown ones as an option for jewellery.”

The timing of this transition attempt is significant. Just yesterday, amid escalating geopolitical tensions linked to the Iran conflict, gold prices surged again, pushing rates in major Indian cities back toward record levels. This comes on the back of a broader multi-year rally that repeatedly took gold above ₹70,000 per 10 grams during 2024–25. 

While such price spikes traditionally moderate volumes in the short term, they have not fundamentally altered South India’s gold-first bias. Instead, volatility often accelerates buying during corrections and reinforces gold’s appeal as a long-term store of value.

Read On: Beyond the wedding rush: How jewellery brands are chasing year-round relevance

Rewriting The Narrative Carefully

Experts told e4m that in South India, gold is a cultural currency. So, the brands that are navigating this market well are not positioning lab-grown diamonds as a substitute, however, they are presenting them as a sustainable luxury alternative that offers identical quality to natural diamonds at a more accessible price point. The messaging is built around ethical production, environmental benefits, and conflict-free sourcing. At the same time, international certification is used to address trust, which is critical in jewellery. The narrative is progressive but respectful, framing lab-grown diamonds as a complementary addition to traditional collections rather than a challenge to gold’s emotional and cultural significance.

Paul Alukkas, Managing Director of Jos Alukkas, said gold continues to hold strong appeal among young buyers, with most still viewing it as both a store of value and a financial investment. However, he noted a clear shift in buying preferences. “Due to the high price of gold, many are opting for lightweight, contemporary, everyday-wearable designs rather than heavy, traditional pieces,” he explains, highlighting the growing demand for minimalist, trend-driven jewellery that fits modern wardrobes and lifestyles.

For emerging lab grown diamond players, adoption is widening beyond metros. Vidita Kochar, Co-Founder, Jewelbox said, “South India is increasingly ready for lab-grown diamonds. While Bengaluru and Hyderabad remain leading early adopters, we are seeing strong traction from Tier 2 and Tier 3 cities across Karnataka, Telangana, Tamil Nadu and Kerala. The shift is urban-led but organically expanding.” The brand added that Bengaluru remains the most progressive market, while Hyderabad is witnessing strong demand for statement solitaires and engagement rings. Chennai and Kochi, though more traditional, are seeing steady growth as education builds confidence.

Prithviraj Kothari, Managing Director at RiddiSiddhi Bullions and President of the India Bullion and Jewellers Association, observed, “South India is gradually opening up to lab-grown diamonds, but adoption is still largely urban-led. The biggest challenge is cultural attachment to gold as both ornament and investment. LGDs lack the intrinsic ‘store of value’ perception. In the near term, they will largely remain complementary to gold, especially in South India.”

Other lab grown diamond brands see evolution underway. As per, Namita Kothari, Founder of Akoirah by Augmont, “South India is ready, but selectively so. Bengaluru is the fastest-moving market, while Hyderabad is seeing strong uptake in engagement solitaires and occasion-led statement pieces. Innovation is positioned as evolution, not disruption. In the short term, LGDs are complementary, but in the long term, they will evolve into independent bridal statements, particularly for reception looks and destination weddings.”

Demand for Gold

According to updates from the World Gold Council, India’s gold demand entered the recent festive and wedding season on an encouraging note despite price fluctuations, underscoring gold’s resilience as both a consumption and savings asset. In southern markets in particular, gold buying remains deeply tied to life-cycle events and cultural obligation rather than pure price sensitivity.

At the same time, the broader jewellery market is expanding structurally. A 2024 report by Motilal Oswal estimates that India’s jewellery market is set to grow at a 15–16% CAGR to reach $145 billion by FY28, with the organised segment projected to grow at over 20% CAGR and account for 42–43% of the total market. 

It is within this expanding organised ecosystem that lab-grown diamonds are attempting to scale. India’s LGD market is currently valued at ₹3,452 crore ($400 million) and is projected to grow to ₹5,179 crore ($600 million) by 2028, according to Wazir Advisors. Data from Future Market Insights further indicates that Western and Southern India currently hold the largest share of the LGD jewellery market due to higher urban consumption and awareness levels.

However, penetration does not automatically translate into preference, particularly in the South, where gold plays a dual role as ornament and financial hedge.

Read On: Jewellery brands ramp up festive AdEx by 20-40%

Contrasting Marketing Approaches

Advertising spends reveal the divergence in narrative muscle. Traditional and omnichannel jewellery brands continue to double down on gold-led storytelling. Titan Company — which owns Tanishq, CaratLane and Mia, increased its ad budget by 14% to ₹1,308 crore in FY25, with television accounting for 77% of ad volumes (up from 64% in FY24), according to TAM AdEx. CaratLane alone spent ₹225 crore on marketing in FY24. Kerala-based Kalyan Jewellers saw its consolidated advertisement expenditure rise 33% to ₹473 crore in FY25, reflecting continued investment in culturally rooted, state-specific campaigns.

In contrast, digital-first players like BlueStone spent ₹124 crore on advertising and marketing in FY24 and ₹42 crore in Q1 FY25 alone, leaning heavily on digital discovery, the same ecosystem where LGD brands are building education-led narratives around certification, sustainability and design freedom.

The contrast sets up a compelling tension. On one side is a deeply entrenched gold economy reinforced by rising prices and strong festive demand. On the other is a fast-growing, sustainability-led, price-accessible diamond category gaining traction among younger, urban consumers.

The Real Hurdle

While awareness is rising, stakeholders agree that the biggest roadblock in South India is not access, it is perception. “The biggest challenge is cultural attachment to gold as both ornament and investment. In South India, jewellery is deeply linked to wealth preservation and social status. Lab-grown diamonds do not yet carry the same store-of-value perception, and resale concerns remain a significant hurdle," said Prithviraj.

This perception gap is particularly sharp in bridal. Gold continues to dominate as the core wealth asset in weddings, with diamonds, whether mined or lab-grown, often playing a secondary, aesthetic role rather than a financial one.

Adding to this, Namita mentioned, bridging perception around long-term value and continuing consumer education are central challenges.

For several lab-grown diamond brands, being a relatively new category in India meant initially facing questions around value perception, longevity and authenticity. Over time, however, increased consumer education around grading standards, pricing transparency and international certification has helped strengthen confidence. In South India especially, trust-building remains critical.

The omnichannel buying journey plays a significant role, with consumers extensively researching online before validating their purchase in-store. Rather than encountering outright resistance, the category is witnessing gradual and organic growth driven by awareness and reassurance.

Against this backdrop, how innovation is framed becomes crucial. Bhushan Kadam, Senior Vice President – Creative & Strategic Initiatives at White Rivers Media, told exchange4media, “Innovation in South India cannot be framed as disruption. It has to be positioned as value-led progress. Consumers need clarity that lab-grown diamonds are chemically identical to mined stones, internationally certified, and technologically transparent. The focus is on reassurance, larger carat options, design flexibility and ethical sourcing, while respecting traditional jewellery preferences.”

Instead of challenging gold’s dominance, LGD brands are carving adjacent occasions, engagement rings, reception looks, cocktail jewellery, self-purchase milestones and lightweight bridal additions. 

Experts say the narrative around lab-grown diamonds in South India is anchored in three clear pillars. The first is technological clarity, brands are actively educating consumers that lab-grown diamonds replicate nature’s process under controlled conditions and are chemically and physically identical to mined stones. The second is ethical reassurance, with messaging centred on conflict-free sourcing, environmental responsibility and transparent production practices. The third is design empowerment: the ability to access larger stones, contemporary silhouettes and bold statement pieces at more accessible price points without compromising on certification or authenticity.

As awareness deepens and trust builds steadily, the more pertinent question for South India may not be whether lab-grown diamonds can replace gold, but how large a complementary space they can carve out within a market that continues to remain gold-first.

The mainstreaming of the category is also visible in how established jewellery majors are responding. Legacy retailers are no longer treating lab-grown diamonds as a fringe experiment but as an adjacent growth vertical within a diversifying jewellery portfolio.

For instance, Senco Gold & Diamonds, has entered the lab-grown diamond manufacturing and retail segment through its brand ‘Sennes’, integrating LGDs into its broader multi-category strategy that already spans gold, diamond, platinum and lightweight jewellery across Tier II and Tier III markets.  Similarly, digital-first retailer BlueStone has recently launched its lab-grown diamond line ‘Ethera’, aligning the offering with contemporary design, accessibility and sustainability-driven messaging.

The entry of established players signals a broader industry shift, with lab-grown diamonds positioning themselves not in opposition to gold but as a complementary category targeting younger, design-conscious and occasion-driven consumers.