Indian diamond export revenues will face an estimated 8–10% decrease during FY26, according to the assessment by Crisil Ratings. The market decline stems from two primary factors: a 10% US duty on natural diamonds and increasing competition from manufactured lab-grown diamonds (LGDs). The US import tax increase will further exacerbate existing difficulties, as the US accounts for more than thirty percent of India's diamond export revenue.
The market assessment from Crisil utilizes information gathered from 43 diamantaires, who generate one-fourth of the industry's revenue, alongside their observations of declining international markets and growing US acceptance of lab-grown diamond (LGD) stones. The decline in export volumes between FY25 led to decreased revenues of $13.3 billion, due to LGD competition and poor demand in the Chinese market. The market continued to decline in volume, despite a late surge in sales before tariffs took effect.
The anticipated revenue decline will not stop diamantaires from adopting proper inventory management methods. Crisil asserts that inventory management strategies with controlled control systems enable both margin and financial leverage level protection and realization success. To predict future polished diamond sales patterns, diamond polishers are managing their rough diamond stock levels to maintain steady prices and low inventory levels.
According to Rahul Guha at Crisil Ratings, the prices of natural diamonds are expected to increase by 3–4% during fiscal year 2026. The reduction in miner supply matched with inventory control measures led to his assessment. The price reduction of LGD diamonds will create expanded differences between synthetic and natural diamond prices. The current financial year is expected to experience a forecasted decrease in natural diamond export volumes of between 12% and 14%.
According to the report, Indian diamond polishers cannot easily absorb the impact of rising tariffs on their operations, as they typically operate at margins of between 4% and 5%. The price burden should be accepted by either miners or retailers to minimize margin pressure for Indian diamond polishers. The operating margin space is expected to decline by 20–30 basis points, resulting in a rate of 4.3–4.5%, according to Crisil.
Working capital requirements are expected to decrease because inventory stock has declined by 5–7% following last year's inventory cut of 10–15%. Still, financial institutions will continue examination of credit metrics, according to Himank Sharma from Crisil Ratings. Studies forecast that Diamantaire's financial leverage will remain at 0.8x during the period, while interest coverage is expected to reach 2.5x by FY26.