This paper presents a political economic appraisal of the de-peasantisation of indigenous communities through an ethnographic exploration of artisanal mining and trade of coloured gemstones in the Kalahandi district of western Odisha (formerly Orissa) in eastern India. It shows that the Khonds, one of the poorest indigenous groups living in this part of India have taken up mining of semi-precious gemstones since the 1990s. This period coincides with the opening of the Indian market of gemstones to the world, alluring this community to often replace their traditional subsistence agriculture with artisanal mining. In addition, a number of other factors have contributed to push more peasants out of agriculture to the informal mining sector for livelihood as it provides them with higher return and quick money. A series of droughts accompanied with deepening agrarian crisis and exploitative caste and class relations have particularly affected the Khond and other tribes of the Kalahandi region. At the same time, the increase in global demands have led to an intensification of informal gemstone mining by the Khonds. However, the indigenous people have not significantly benefitted; although the rate of out-migration has slackened, many are now without land and working in mines as daily wage labourers. This is because the proliferation of mining has also attracted the entry of opportunistic outsiders who collude with the local state, local politicians, caste-leaders and class-elites, police, and bureaucracy to sweep up the profits. This paper shows that the indigenous people continue to remain impoverished as the informal nature of the mining business further pushes them into living precarious lives.