Diamonds are the in-thing in India now. According to De Beers, demand for polished diamonds in India and China could reach the same level as in the US.

Gareth Penny, managing director of De Beers, said Hong Kong and India would account for the one-third of the global demand for the precious stones as diamond engagement rings and other diamond-studded jewellery are fast becoming a rage among the youngsters, especially among the Indian and the Chinese brides.

About two decades ago, hardly any Chinese or Indian brides received diamond engagement rings. But, now nearly half of the couples getting married in these countries are buying them.

The diamond supply would decline in future. Reason: the great diamond mines that were discovered around 20 years ago are not being replaced today and thus there may be some significant decline in diamonds.

In 2009, the US accounted for about 40 per cent of global consumer diamond demand, with China and India around 6-7 per cent. However, De Beers forecasts that China would account for 16 per cent of the global diamond demand and India for the same percentage by 2016.

A recent study by KPMG says India is set to realise total jewellery sales of $21 billion by 2010 and $37 billion by 2015. Currently, out of eight key world retail markets, the US accounts for 45 per cent of the total jewellery sales, which includes diamond, platinum, gold and others. India and China, which follow with 8.3 per cent and 8.9 per cent in the global jewellery sales, will emerge as the market equivalent to the US by 2015 following the rise in the demand for diamond jewellery.

Demand for diamond jewellery in India is expected to touch 6.1 billion (Rs 30,000 crore) by 2012, a 50 per cent increase compared to the current $4.2 billion diamond jewellery sales. Thanks to the rising gold prices over the last couple of years and the fast growth popularity of the diamond-studded jewellery among the Indians.