Middle East Tensions Push Lab-Grown Diamond Rough Prices Up 15%

Surat | Gujarat —  The escalating war-like situation in the Middle East is beginning to ripple through the global diamond trade, with lab-grown rough diamond prices rising by nearly 15% after manufacturers in China cut production and increased rates. The development has triggered concern in India’s diamond hub Surat, where manufacturers rely heavily on imported rough stones.

The tensions intensified after the United States and Israel launched attacks on Iran, creating instability across the region and disrupting trade flows. The situation has slowed down exports and imports in the international diamond market, forcing synthetic diamond manufacturers in China and India to scale back production.

Industry sources say Chinese HPHT (High Pressure High Temperature) rough diamond producers and CVD lab-grown diamond manufacturers in Surat and Mumbai have both reduced output due to weak global demand and uncertainty in the supply chain.

However, the reduced production has also resulted in a supply squeeze, prompting several Chinese manufacturers to raise prices sharply.

One of the major Chinese companies, Zhengzhou Sino-Crystal Diamond Company, recently informed traders and manufacturers in Surat and Mumbai about the price hike.

In its message to industry stakeholders, the company stated that the cost of production has increased significantly due to rising raw material prices and currency fluctuations.

“Considering the significant increase in the prices of equipment and raw materials, along with the continuous appreciation of the Chinese currency against the US dollar, the company’s operating costs have risen substantially,” the company said.

“In order to maintain stability in the rough lab-grown diamond market and ensure smooth operations, the price of rough lab-grown diamonds will be increased by 15% based on the current price, effective March 3, 2026,” it added.

The move is expected to directly affect diamond processing units in Surat, the world’s largest hub for lab-grown diamond cutting and polishing. Industry insiders believe that if the higher prices persist, manufacturers in Surat and Mumbai may soon consider raising the prices of their own lab-grown rough and polished diamonds.

Dubai trade disruption halts shipments

The geopolitical tensions have also disrupted trade routes through Dubai, which is one of the most critical hubs for the global diamond trade.

Kirit Bhansali, Chairman of the Gems and Jewellery Export Promotion Council, said that the ongoing crisis has brought a large portion of India’s diamond export and import activity to a halt.

“Due to the war-like situation in Middle East countries, India’s entire export and import through Dubai has stopped. Everyone in the industry is aware of the seriousness of the situation,” Bhansali said while speaking to a business news channel.

Dubai has emerged as the world’s largest rough diamond trading hub, with nearly 90% of rough diamond transactions routed through the city.

Bhansali warned that if the disruption continues for more than two weeks, the industry could face shortages of polished diamonds and severe employment challenges.

“If the situation continues, maintaining the workforce of thousands of diamond artisans will become difficult,” he said.

To tackle the crisis, the industry has begun exploring alternative logistics routes. Bhansali revealed that discussions are underway with Indian diplomatic authorities to temporarily reroute shipments.

“Our Dubai office has contacted the Indian Ambassador to the UAE, Deepak Mittal. Until Dubai airport operations normalise, the possibility of transporting diamonds by road to Muscat and then shipping them by air is being examined,” he said.

Experts warn that if geopolitical tensions continue and supply chains remain disrupted, the prices of polished lab-grown diamonds could climb further in the coming weeks, putting additional pressure on Surat’s globally significant diamond industry.