India’s gems and jewellery trade is facing significant disruption as the escalating conflict in the Middle East interrupts both exports of finished jewellery and imports of rough diamonds. Widespread flight cancellations and the closure of key airspace corridors have severely impacted logistics between India and the region.
Dubai, one of the world’s most important trading hubs for polished diamonds, rough diamonds, and bullion, has suspended numerous cargo and passenger flights. The resulting logistical bottleneck has effectively halted shipments of both finished jewellery and the raw materials essential to India’s diamond manufacturing industry.
Industry leaders have confirmed that trade flows have stalled. Vipul Shah, Managing Director of Asian Star, one of India’s leading diamond exporters, stated that exports and imports involving the Middle East have effectively come to a standstill due to the absence of functioning logistics channels.
The Middle East plays a critical role in India’s jewellery sector, accounting for nearly a quarter of the country’s annual gems and jewellery exports, which are valued at approximately US$30 billion. The United Arab Emirates is also a vital supplier of rough diamonds, providing more than two-thirds of India’s imports of uncut stones.
India remains the world’s dominant diamond manufacturing centre, processing approximately 90% of the global diamond supply through its extensive cutting and polishing industry.
According to Shaunak Parikh, Vice Chairman of the Gem and Jewellery Export Promotion Council (GJEPC), exports are expected to decline in March due to the disruption in Dubai. Beyond being a key consumer market, Dubai also acts as a major intermediary hub connecting diamond-producing countries with international consumer markets. Should the conflict continue, the resulting uncertainty could begin to weigh on demand.
India’s jewellery sector had already become increasingly dependent on Middle Eastern demand following the imposition of tariffs by the United States on Indian goods last year, which reduced American purchases.
Market volatility has further complicated the situation. Overseas buyers are becoming cautious about placing new orders amid fluctuations in the rupee–U.S. dollar exchange rate and ongoing logistical constraints, according to Colin Shah, Managing Director of Kama Jewelry.
The Indian rupee recently weakened to a record low of 92.3025 against the U.S. dollar, adding another layer of uncertainty for exporters.
For now, many transactions are being postponed. According to a Mumbai-based diamond exporter, both buyers and sellers recognise that the conflict has disrupted trade routes, and as a result, shipments are increasingly being delayed until logistics stabilise.
For the global diamond industry, the disruption highlights the vulnerability of the supply chain to geopolitical instability, particularly when critical trading hubs and transport corridors are affected.
Source: DCLA
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