We demonstrate graded-index-separate-confinement-heterostructure InGaN laser diodes (GRINSCH) grown by metal organic vapor phase epitaxy. In this type of structure, the optical mode is confined close to the active region by cladding layers with linearly changing Al content. The virtue of this structure lies in simultaneous improvement of injection efficiency through the funneling effect and mode confinement. After a careful modeling we demonstrate that GRINSCH InGaN laser indeed possess very encouraging properties. Low threshold current density of around 3.5 kA/cm2 accompanied by high differential gain (dG/dJ = 14.93 cm kA−1) make these devices an interesting alternative for the classical step-index structure.