Indian gem, jewelery exporters worried over Israel-Hamas war

New Delhi: The Gem and Jewelery Export Promotion Council (GJEPC) on Monday expressed concern about the escalating Israel-Hamas conflict, pointing out that India’s gem and jewelery exports to Israel exceeded $1.2 billion in the last financial year. .

India, which is responsible for cutting and polishing 90% of rough diamonds globally and employing around 20 lakh people, is facing an unprecedented crisis due to falling demand, due to which trade bodies have asked members to freeze the rough stones for two months. Has been asked to stop the import.

Israel on Saturday morning witnessed a surprise and unprecedented attack by Hamas, which rules the Gaza Strip, on its southern parts.

Exports have seen a 30.27% year-on-year decline so far in the current fiscal year, the biggest decline in at least half a decade. In particular, there has been a decline in demand from important markets such as China and the US.

“India has witnessed substantial export of gems and jewelery to Israel amounting to $1279.76 million during the financial year 2022-23. It is important to note that Israel, being a very important trading hub, also exports rough diamonds worth $1782.80 million,” said Vipul Shah, Chairman, GJEPC.

The Shah emphasized Israel’s role as a primary re-export market and described the ongoing conflict as “serious”. He said it was premature to conclusively assess the impact, and “we have not (so far) seen any disruption to regular transactions.”

According to Mint report, demand usually increases before the festive season, but this year seems to be an exception.

India sources rough diamonds from companies like De Beers, Rio Tinto and Russia’s Alrosa. These diamonds are processed at Surat Diamond Bourse after reaching through Bharat Diamond Bourse (BDB). Subsequently, the polished diamonds are sent back to the BDB for export, primarily to the US, Hong Kong and Belgium.

Industry bodies including GJEPC, BDB and Surat Diamond Bourse have urged their colleagues to impose a moratorium on rough diamond imports from mid-October to mid-December.

Previous examples of such import blockages coincided with the Saudi Arabian oil embargo in 1973, the balance of payments crisis in India in 1992, and the global financial crisis of 2008.

In FY23, India’s merchandise exports and imports with Israel stood at $8.4 billion and $2.3 billion, respectively, resulting in a trade surplus of $6.1 billion. Major exports include diesel ($5.5 billion) and refined diamonds ($1.2 billion), while primary imports include rough diamonds ($519 million) and polished diamonds ($220 million), among other products.

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