Kolkata: Escalation of the Iran-Israel conflict is likely to benefit the exports of cut and polished diamonds (CPD) from India, as shipments from Israel to the global markets are expected to fall significantly. But the possibility of its effect spilling over into oil prices, in turn hurting the global economy, is a risk as it could affect demand.
Israel and India are competitors in the global market for cut and polished diamonds, so any drop in supplies from Israel would help Indian exporters, according to traders. The US and China are the major importing nations from India and Israel.
The supply of rough diamonds from Israel to India is also expected to be impacted. This would allow Indian exporters to bring down their inventory.
In the first seven months of this year, Israel’s diamond exports have fallen by a third and if the geopolitical tension continues, it may fall further. Shipments of cut and polished diamonds from India, meanwhile, fell 20% in the first five months (April-August) of fiscal 2025 to about $5.62 billion from the year earlier. Israel is the fifth largest exporter of cut and polished diamonds in the world, while India is the biggest.
“If the supply of cut and polished diamonds reduces from Israel to the world markets, India will be able to gain in a sense that the exports will not slip significantly. The slide can be arrested,” said Vipul Shah, chairman of the Gem & Jewellery Export Promotion Council. “However, we want peace to prevail in the Middle East so that the global economy is not impacted.”
“We are already suffering from a slowdown in the US and China, the two main consuming nations,” Shah said.
