This is absolutely beautiful dagger, Jens
The "crystal" used on Mughal handles is a Rock Crystal (colourless variety of Quartz). It is carved and polished just like a rock/stone. It comes clear and multi-coloured, with varying degrees of clarity ranging from pure to cloudy with inclusions.
As for glass handles - I don't think the glass can be carved. It would be an extremely difficult and skill intensive process. It had to be cast in shape of a handle, so the difference can be seen upon close inspection.
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