Industry stakeholders say the impact is particularly visible as Dubai remains a major global hub for the trading of polished diamonds, rough stones and gold
Mumbai: Escalating tensions in West Asia are affecting India’s gems and jewellery trade, with disruptions reported in both exports and the import of rough diamonds. The situation follows widespread flight cancellations and airspace restrictions after recent military strikes involving the United States, Israel and Iran.
Industry stakeholders say the impact has been particularly visible in shipments routed through Dubai, a major global hub for the trading of polished diamonds, rough stones and bullion. With several cargo and passenger flights suspended, the movement of both finished jewellery exports and key raw materials has slowed significantly.
Dubai plays a crucial role in the international flow of precious metals and diamonds. Gold shipments destined for markets such as Switzerland, Hong Kong and India typically move by air because of security requirements and the high value-to-weight ratio of bullion. However, flight disruptions have temporarily interrupted these movements. “It looks like most, if not all, airlines have cancelled their flights, so not going to be any gold moving for a couple of days,” an industry source said.
The interruption has effectively paused trade routes between India and parts of the Middle East, according to exporters monitoring the situation. “Exports and imports from the Middle East have come to a standstill, and there are no logistics in place to move goods,” Vipul Shah, Managing Director of Asian Star, a leading diamond exporter, told news agencies.
The Middle East remains a key market for India’s gems and jewellery sector, accounting for close to a quarter of the country’s annual exports valued at about $30 billion. At the same time, the United Arab Emirates is the primary supplier of rough diamonds to India, contributing more than two-thirds of total imports. India continues to dominate the global diamond processing industry, cutting and polishing nearly 90% of the world’s diamonds.
Dubai is not only a major market for gems and jewellery, but also a key intermediary between diamond-producing countries and major consumer markets, said Shaunak Parikh, Vice Chairman of the Gem and Jewellery Export Promotion Council. “If the conflict drags on, it could hurt demand,” Parikh told Reuters.
Exporters note that the Middle East has grown in importance as a destination market, especially after Indian jewellery shipments to the United States faced headwinds following tariff measures last year. Overseas buyers are also cautious about placing orders amid volatility in the rupee-US dollar exchange rate and logistical constraints, said Colin Shah, Managing Director, Kama Jewelry.
Currency movements have added to the uncertainty. The Indian rupee weakened to a record low of 92.3025 against the U.S. dollar on March 4, 2026.
Some exporters say buyers and sellers are mutually agreeing to delay deliveries until transport routes stabilize.
The extent of the disruption will depend on how long the regional tensions persist. If flight suspensions continue for an extended period, shipments of gold and diamonds between producing regions and key consumer markets could face prolonged delays.
For now, industry participants say they are closely monitoring developments as logistics networks and trade flows remain under pressure.
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