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West Asia Conflict Disrupts Gems and Jewellery Industry Exports From India
West Asia Crisis: The ongoing geopolitical tensions in West Asia and flight cancellations have caused instability in India's gems and jewelry exports. Disruption of air cargo routes, fluctuations in the dollar, and increased shipment insurance costs have increased traders' concerns. Let's explore the details.
The stability of gems and jewelry exports from India is at risk due to the ongoing geopolitical risks. The main factor for this is the suspension of flights, which affects air cargo operations in West Asia.
Colin Shah, the managing director of Kama Jewelry, has stated that the US-Israel-Iran conflict has impacted the gems and jewelry business in India. Exports and imports to Israel and Dubai would be significantly affected. Additionally, fluctuations in the dollar’s value have raised concerns for exporters, making the business more cautious.
According to him, the smooth flow of trade is only possible by resolving logistical issues. Also, the costs of insuring goods have been three- to four-fold, which affects the margins of the business.
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Shah says, "Despite this, the supply-demand balance for gems and jewelry exports is currently working well, as there is sufficient inventory to meet the already affected demand. We hope that the countries involved in the war will soon reach a mutually agreed settlement and the trade disruptions will end."
Diamond trader Mahesh Kothari explains, "Israel is a major market for raw materials and high-end diamonds. The war will increase tensions in the industry, and the delays and disruptions in international flights, along with the closure of several international airports, are adding to the problems."
Kothari says, "Dubai is a major hub of global trade and an important market for us, as Dubai is the world's largest trading market for raw materials. We import raw materials from there. The war will impact both exports and imports." If this war continues for a long time, it could have serious implications for the gems and jewelry sector.
Mahesh Jain, a diamond trader and retailer, says Mumbai and Surat together export approximately 400 to 500 parcels daily and import 250 to 300 parcels via Dubai. However, flight cancellations and airport closures to Israel and West Asia are impacting business. The industry says the gems and jewelry business is heavily dependent on other countries, and geopolitical turmoil and instability impact it. A prolonged war in West Asia will disrupt supply chains, impacting raw material availability and export commitments.
