K-Shaped Jewellery Demand in 2026: What the INSTORE Big Survey's High-End vs Budget Split Means for Indian Lab-Grown Diamond Buyers

The K-shaped economy — defined as a post-stimulus divergence in which affluent consumers accelerate spending while middle- and lower-income households pull back — is now measurably reshaping jewellery retail. INSTORE's 2026 Big Survey of more than 500 independent North American jewellers puts hard numbers on the split for the first time. For Indian buyers weighing a lab-grown diamond purchase, the data is more than a curiosity: the same structural forces driving the US market are already visible in India's own export figures, retail formats, and consumer behaviour.

The headline finding: 51% of jewellers report demand pulling toward one or both ends of the price spectrum. Of those, 28% describe the classic K pattern — strong at both the high end and entry level, weak in the middle — while 15% see strength only at the top and 8% only at the entry level. A further 43% of all respondents say demand is strong at the high end, either alone or alongside the entry level. That is the clearest single signal in the survey.

Before unpacking what this means segment by segment, here is how the two ends of the market compare across the metrics that matter most to an Indian diamond buyer in 2026:

Metric	High-End / Natural Diamond Segment	Budget / Lab-Grown Diamond Segment
Jeweller demand signal (INSTORE 2026)	43% of jewellers report strong top-end demand	8% entry-level only; 28% strong at both ends
Typical retail price, 1-carat stone (India)	₹2 lakh–₹5 lakh (natural)	₹35,000–₹1 lakh (lab-grown)
Average export price per carat from India	~$760 (natural polished)	~$60–$74 (lab-grown)
India polished export volume FY2025-26	16.0 million carats (natural)	18.8 million carats (lab-grown)
Primary purchase driver (US jeweller survey)	Rarity, provenance, resale perception	Price/affordability (52% of LGD buyers)
Average engagement ring centre stone size	~1 carat typical	2.45 carats (lab-grown, 2025 data)
Share of India's wholesale diamond export value	More than 91%	Less than 9%
US jeweller adoption rate (2026)	Universal (natural always stocked)	92% now stock lab-grown, up from 10% in 2016

Sources: INSTORE Big Survey 2026, Lab Diamond Insights / GJEPC data, Edahn Golan / Tenoris

The table captures a market bifurcating in real time. High-end buyers are spending more per piece; budget buyers are using lab-grown diamonds to get more stone for less money. The middle — the aspirational consumer who once stretched for a 0.75-carat natural diamond — is the segment under the most pressure.

What exactly is a K-shaped economy, and why does it matter for jewellery?

A K-shaped economy describes a post-recession or post-stimulus recovery in which higher-income households continue to prosper while lower- and middle-income households stagnate or decline — the two groups diverging like the two arms of the letter K. The term gained traction after pandemic-era stimulus of 2020–2022 drove record jewellery sales, followed by a sharp correction as inflation eroded real wages for the bottom half of earners while asset prices (equities, real estate) continued to reward the top.

Industry analyst Paul Zimnisky, writing in Solitaire International, quantifies the structural shift: the relative wealth of the top 50–90% of US earners has dropped to 29% from 34% over the past 25 years, with that share moving directly to the top 10%. In a $19 trillion consumer economy, a mid-single-digit percentage shift is enormous — and it hits discretionary categories like jewellery acutely.

The consequences are already visible at the corporate level. LVMH — parent of Tiffany & Co. and the world's largest top-tier luxury conglomerate — saw its stock fall 28% in Q1 2026, erasing roughly $40 billion of market value after five consecutive quarters of declining sales. Management acknowledged the dynamic plainly: "We try to attract entry-level customers… when the economic climate is not so good, obviously, it's firstly these customers who disappear." Signet Jewelers, the world's largest diamond seller and a long-time fixture of the middle-class market, is explicitly targeting the "upper-middle" class while simultaneously acknowledging that "space has opened up in smart value, high quality at the right price."

For Indian buyers, this is not an abstract American story. India's own gems and jewellery sector is navigating the same bifurcation: premium brands are expanding aggressively while lab-grown diamonds are capturing the budget-conscious buyer who wants size and quality without the natural diamond price tag.

What does the INSTORE Big Survey actually measure, and how reliable is it?

The INSTORE Big Survey is an annual anonymous survey of independent jewellery store owners and managers across North America, conducted via an online form. The 2026 edition drew responses from more than 500 participants, surveyed between September 14 and October 12, 2026. Independent jewellers — who answer to no mining company and no industry lobby — are the most candid source of retail demand data in the diamond industry. Their responses reflect actual sales floors, not investor relations messaging.

The survey's demand-distribution question asked jewellers to characterise where in their price range sales are strongest. The results:

29% — demand evenly spread across price points
28% — strong at both high end and entry level (classic K-shape)
17% — strongest in the middle
15% — strongest at the high end only
8% — strongest at the entry level only
3% — soft across the board

Two corroborating data points from the same survey reinforce the polarisation story. First, 52% of jewellers report their sales have become more concentrated over the past few years, with 6% calling the shift "dramatic." Only 12% say they are making more small sales to a larger pool of customers — the opposite pattern. Second, for 42% of jewellers, their top 5% of clients now account for 30% or more of total sales. For more than one in five (22%), that figure is 40% or more.

Seventy percent of jewellers reported higher revenue over the past 12 months, and 75% saw their average price per item rise. Foot traffic was the weakest performance measure, down for one in five stores. Higher revenue on fewer transactions is the arithmetic of a market serving fewer, wealthier customers more expensively — textbook K-shape.

How does the K-shaped demand split affect lab-grown diamond buyers specifically?

A lab-grown diamond has essentially the same chemical composition, crystal structure, and optical and physical properties as a natural diamond — grown in a controlled laboratory environment rather than mined from the earth. In 2026, 92% of US jewellers stock and sell lab-grown diamonds, up from roughly 10% in 2016 — near-total market penetration in a decade.

The K-shaped demand pattern interacts with lab-grown diamonds in a specific way. The entry-level arm of the K — buyers pulling back on overall spend but still wanting meaningful jewellery — is disproportionately served by lab-grown. INSTORE's survey found that 52% of jewellers rank price and affordability as the single most common factor driving customers toward lab-grown diamonds. The second most cited factor is the ability to get a larger stone for the same budget — another dimension of the same price argument.

This is not a marginal trend. BriteCo's jewelry, diamond and watch price index shows lab-grown centre stones going from single digits in 2019 to 51% of new engagement rings through June 2026. Tenoris puts the unit share even higher. The average lab-grown engagement ring centre stone is now 2.45 carats — more than double the typical natural diamond centre stone — because buyers are using the price differential to upgrade size rather than pocket the savings.

For Indian buyers, the price gap is stark. A 1-carat lab-grown diamond retails for approximately ₹35,000–₹1 lakh, compared to ₹2 lakh–₹5 lakh for a comparable natural stone. That 3–5x difference makes lab-grown the rational choice for any buyer in the lower arm of the K — someone who wants the look and emotional significance of a diamond without the premium attached to geological origin.

The high-end arm is a different story. Buyers spending at the top of the market are not choosing lab-grown primarily for affordability; they are choosing natural diamonds for rarity, provenance, and the perception of enduring value. This is why Reva Diamonds, backed by the 193-year legacy of P. N. Gadgil & Sons, has expanded to 37 stores focused exclusively on certified natural diamonds — targeting the upper arm of the K with transparency, certification, and personalised service as differentiators.

Is the middle market really disappearing, or just being squeezed?

The INSTORE data suggests the middle is not disappearing but is being squeezed from both sides. Only 17% of jewellers say demand is strongest in the middle — the smallest share of any positive demand category. And only 29% describe demand as evenly spread, the closest proxy for a healthy middle market.

Zimnisky's analysis in Solitaire International frames the risk plainly: "The industry still relies on the more 'aspirational' consumers to thrive — for example, the middle class in consumer-heavy economies like the US." Middle-class consumer sentiment in the US currently sits at the lowest level on record, according to surveys referenced by the US Federal Reserve.

The INSTORE survey editors note the strategic implication directly: "The risk is that the more a store depends on a small circle of big spenders, the more exposed it becomes if even a few of them pull back. For many jewellers, the middle-market customer may be worth fighting for."

In India, the middle-market dynamic has an additional layer. The Priority Jewels industry research report on Indian gems and jewellery (August 2026) notes that India's growing middle class — increasingly concentrated in tier II and tier III cities — is a structural demand driver for the sector. But this cohort is also the most price-sensitive, and the most likely to be captured by lab-grown diamonds rather than natural stones. The self-purchase trend among women, which Indian Retailer reports has grown more than 35% according to Deloitte data, is particularly concentrated in this middle segment — and lab-grown diamonds are the primary beneficiary.

What does India's own export data tell us about the K-shaped split?

India's export data provides a ground-level view of the same bifurcation playing out in the production and trade layer beneath retail. For the first time in FY2025-26, India's lab-grown diamond exports exceeded natural diamond exports by volume: 18.8 million carats of lab-grown versus 16.0 million carats of natural polished.

The value picture tells the other half of the K. Despite higher volume, lab-grown diamonds account for less than 9% of India's wholesale diamond export value, while natural diamonds account for more than 91%. The average export price per carat is approximately $60–$74 for lab-grown versus approximately $760 for natural polished — a roughly 10–12x price differential at the wholesale level.

This is the K-shape expressed in trade data: lab-grown dominates by units (the volume arm), natural dominates by value (the premium arm). Indian manufacturers and exporters are navigating both arms simultaneously, which is exactly what Goldiam International's FY26 results illustrate. Goldiam reported its highest-ever revenue, crossing ₹1,000 crore (₹10,212 million) in FY2026 for the first time, with lab-grown diamond jewellery accounting for 88% of export revenue in Q4 FY26, up from 82% in Q4 FY25. Revenue grew 27.5% year-on-year despite tariff disruptions and geopolitical headwinds — a result driven almost entirely by lab-grown volume at the budget end of the global market.

Goldiam's experience is instructive for Indian buyers: the supply chain for lab-grown diamonds is now mature, scaled, and deeply integrated into India's export infrastructure. The stones you buy at a lab-grown diamond retailer in Mumbai, Delhi, or Bengaluru are coming from the same production and polishing ecosystem that is shipping 18.8 million carats a year to the world.

What are the pricing risks for lab-grown diamond buyers in this environment?

The K-shaped demand environment creates a specific pricing risk worth understanding before you purchase. Edahn Golan of Tenoris, speaking on INSTORE's Talking Diamonds podcast, noted that lab-grown diamonds leave India at an average of $70 per carat, and retailers are buying loose stones at just under $200. Gross retail margins that started around 45% are now well over 75% because retailers have not passed the full cost decline on to consumers. "That has an expiration date," Golan said.

BriteCo CEO Dustin Lemick goes further, forecasting lab-grown retail prices "in the hundreds of dollars, not in the thousands" within five years. If that trajectory holds, buyers who purchase lab-grown diamonds today at current retail prices may find the resale or replacement value of their stones lower than expected — not because the diamond itself has changed, but because the market price of identical stones will have fallen further.

This is not a reason to avoid lab-grown diamonds. It is a reason to buy them with clear eyes: a beautiful, chemically identical diamond at a fraction of the natural price, optimised for size and quality at your budget, not for long-term store of value. If resale value matters to you, natural diamonds — despite their own price declines (the Diamond Standard Index is down 68% from its 2011 peak) — retain more of that characteristic than lab-grown stones in the current market.

The natural diamond price story has its own complexity. Zimnisky notes that natural diamond prices are down roughly 50% from their Q1 2022 highs, while the US Consumer Price Index is up 14% and gold is up 125% over the same period. On a relative basis, natural diamonds look like good value — which is part of why the high-end arm of the K is spending on them.

How should Indian buyers use this data when shopping for a diamond in 2026?

The K-shaped demand picture, read alongside India's export data and the INSTORE survey findings, suggests four practical conclusions for Indian diamond buyers.

If your budget is under ₹1.5 lakh for a centre stone, lab-grown diamonds are the rational choice. You will get a larger, higher-clarity stone than any natural diamond at that price point, from a supply chain that is now mature and well-certified. The average lab-grown engagement ring centre stone has reached 2.45 carats — a size that would cost ₹15–25 lakh or more in natural. You can explore options across a range of styles — from oval solitaires to curved band designs — without the premium attached to natural stones.

If your budget is above ₹3 lakh for a centre stone, you are in the zone where the K-shaped market's upper arm operates. Natural diamonds are competitive here, particularly given their relative price declines. Lab-grown diamonds at this budget level deliver extraordinary size — a 3–4 carat stone with excellent cut and colour — that is simply not achievable with natural at the same price. The choice comes down to whether provenance and long-term value perception matter more than size and optical performance.

If you are buying for investment or resale, neither lab-grown nor natural diamonds are reliable stores of value in 2026. Natural diamonds have more historical precedent for resale, but prices are down significantly from recent highs. Lab-grown diamonds have essentially no secondary market at current retail prices. Buy for the joy of the piece, not the expectation of appreciation.

If you are buying in the middle of the market — say ₹1.5–3 lakh — this is precisely the segment the INSTORE data identifies as under the most pressure. Jewellers serving this range are fighting for customers on both sides, which means you have real negotiating leverage. Ask for certification, compare across retailers, and do not accept the first price offered. The best lab-grown diamond engagement rings in India across every budget span this range, and competition among retailers is genuine.

What is the "second door" strategy, and does it apply to Indian retail?

One of the more interesting strategic responses to K-shaped demand that Edahn Golan describes in the INSTORE podcast is the "second door" model: opening a separate store that sells only lab-grown diamonds, creating differentiation, allowing a lower price point without dragging down the flagship natural diamond brand, and keeping price-sensitive shoppers within the retailer's orbit rather than sending them to competitors. "I don't want to send them out. I want to send them to my other store," Golan says. Several US retailers have implemented this, with early results that appear positive.

In India, this model is already emerging, though not always explicitly framed that way. Reva Diamonds — the certified natural diamond brand launched by P. N. Gadgil & Sons in December 2024 — is effectively the premium door, now at 37 stores, serving the upper arm of the K. Separate lab-grown diamond retailers and dedicated sections within multi-brand jewellery stores serve the lower arm. The bifurcation of retail formats mirrors the bifurcation of demand.

For Indian buyers, this makes the retail space easier to navigate. Stores are increasingly specialised, which means the advice you get in a lab-grown diamond boutique is more likely to be genuinely calibrated to that product category than it would have been five years ago, when most jewellers were still treating lab-grown as a reluctant add-on. Our guide to the best lab-grown diamond stores in Delhi covers the specialist retail space in detail.

Is the "eco-friendly" narrative for lab-grown diamonds still valid?

This is an area where the data is genuinely thin and the honest answer involves uncertainty. The lab-grown diamond industry has long marketed its product as a more sustainable alternative to mined diamonds, and for many buyers — particularly younger, environmentally conscious consumers — this has been a meaningful part of the purchase rationale.

Both Dustin Lemick and Edahn Golan flag this as a vulnerability in the INSTORE podcast. "People still think they're green, and they're really not," Lemick says, pointing to energy use and factory conditions at HPHT (high-pressure, high-temperature) manufacturing plants. Golan identifies two specific risks: a major investigative exposé on working conditions at an HPHT facility, or a major consumer brand associating lab-grown diamonds with mass-market non-luxury goods. "Once it's footwear, it's not luxury anymore."

The honest position for an Indian buyer is this: lab-grown diamonds are not inherently more sustainable than mined diamonds unless the manufacturing facility runs on renewable energy. Some do; many do not. If sustainability is a genuine priority, ask your retailer specifically about the energy source and manufacturing process for the stones they stock. CVD (chemical vapour deposition) grown diamonds, particularly those manufactured using renewable energy, have a stronger environmental case than HPHT stones powered by coal-heavy grids.

What does the K-shaped market mean for the long-term future of lab-grown diamonds in India?

The structural direction is clear, even if the pace is uncertain. Lab-grown diamonds are defined by their physical and chemical identity with natural diamonds — not by their price or market position. As prices continue to fall and manufacturing scales further, the question for the Indian market is not whether lab-grown diamonds will remain relevant, but which segment of the K they will primarily serve.

The evidence from the INSTORE survey, India's export data, and the retail landscape points to lab-grown diamonds consolidating their position in the lower and middle arms of the K — serving buyers who want diamond quality at accessible prices — while natural diamonds retain the upper arm through provenance, rarity, and the cultural weight of geological origin. That is not a diminished role for lab-grown. The lower and middle arms of the K represent the vast majority of Indian buyers by number, even if not by total spend.

Goldiam's record FY26 results — ₹1,000 crore in revenue, 88% lab-grown share, 27.5% growth — demonstrate that the Indian supply chain is already positioned to serve this demand at scale. The buyers who benefit most are those who understand what they are purchasing: a chemically identical diamond, at a fraction of the natural price, optimised for size and beauty rather than rarity and resale. In a K-shaped market, that is a genuinely compelling value for the majority of Indian diamond buyers in 2026.

For those exploring specific styles, our guides on U-prong and six-prong solitaire settings and men's diamond solitaire rings cover the practical buying decisions in detail. If you are curious about how lab-grown diamonds hold up over time — a legitimate question for a piece you plan to wear daily — our real-user durability report covers exactly that.