India’s gem & jewellery industry braces for major impact due to war in West Asia
The Hindu
The Indian gem & jewellery industry, which was upbeat after the announcement of the proposed U.S.-India Trade Agreement in February, is expecting a major impact on trade on account of the escalating geopolitical tensions in West Asia.
The Indian gem & jewellery industry, which was upbeat after the announcement of the proposed U.S.-India Trade Agreement in February, is expecting a major impact on trade on account of the escalating geopolitical tensions in West Asia. While the U.S.-Israel air strikes were initially directed at Iran, killing its long-standing Supreme Leader Ayatollah Ali Khamenei along with the country’s top brass, Iran’s military response extended the war to whole of the oil-rich Gulf Cooperation Council (GCC) region creating acute instability and uncertainty.
Apex trade body the Gem & Jewellery Export Promotion Council (GJEPC) has expressed deep concern over the escalating tensions over the last week as it will be a dual shock to India’s s gem & jewellery supply chain.
India is heavily dependent on the UAE for both exports and raw materials. India’s Cut and Polished Diamond (CPD) and gold jewellery exports flow to UAE which supplies rough diamonds and bullion to the Indian market.
According to trade body the war is leading to upstream supply disruptions and posing threats to raw material inflows. This is due to closure of flights and ports in Israel, Qatar, Kuwait and UAE. So, it has led to demand and supply shocks.
The downstream market disruptions have started impacting demand in UAE, a key centre. Rerouting via Red Sea is rising freight and insurance costs. In a situation of supply constraints and demand volatility the gem and jewellery industry is facing supply chain risk, the body emphasized.
The GCC markets remained important for India’s gem & jewellery sector due to cultural preferences and high consumer demand.
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