Middle East War Hits Indian Diamonds And Ceramics Exports

India-West News Desk

NEW DELHI – The escalating conflict involving the United States, Israel, and Iran is disrupting key export sectors in Gujarat, with the diamond trade facing immediate logistics bottlenecks and the ceramic industry warning of potential shutdowns due to fuel supply concerns, an India Today report said.

India’s diamond industry, centered in Surat, relies heavily on global trading hubs such as Dubai and Israel for both raw materials and export markets. Roughly 90 percent of the world’s diamonds are cut and polished in India, making uninterrupted international movement of stones critical to the sector.

Industry leaders say transport disruptions linked to the conflict have stalled the daily movement of diamonds between India and Dubai.

Around 70 percent of Surat’s rough and polished diamonds pass through Dubai before reaching global markets. India also exports finished diamonds to Israel’s jewelry industry while importing rough stones for domestic processing.

The Middle East remains a major market for India’s gems and jewelry sector, with companies maintaining retail networks, manufacturing units, and logistics operations across the region. Between April 2024 and March 2025, India exported gems and jewelry worth $548.27 million to Israel while importing $259 million.

Dubai also functions as a key bullion supply route for India.

The conflict is also raising alarms in Gujarat’s ceramic manufacturing hub of Morbi, where exporters warn that disruption to energy supplies through the Strait of Hormuz could halt production.

Ceramic tile manufacturing requires kilns operating continuously at temperatures between 1,000 and 1,200 degrees Celsius, making the industry heavily dependent on steady fuel supplies and current reserves may last only a few days.

The Morbi ceramic industry provides employment to about 350,000 people directly and indirectly, making it one of India’s largest export-oriented manufacturing clusters.