Surat Diamonds loose sheen Amidst Israel-Palestine Conflict

Surat :  The Surat diamond industry, one of the world’s largest diamond cutting and polishing hubs, is bracing itself for significant losses as it grapples with plummeting diamond prices in the wake of the ongoing Israel-Palestine conflict. Israel, a key trade partner of the Indian diamond industry, plays a pivotal role in the global diamond trade, exporting high-quality diamonds, especially larger sizes and solitaires, to jewelry consumption centers worldwide.

During the 2022-23 fiscal year, India’s annual diamond exports to Israel amounted to a staggering USD1,279.76 million. It is significant to note that Israel being a very important trading centre also exports rough diamonds to the tune of USD 1782.80 million.

The Israel Diamond Exchange (IDE) has long been renowned as a trading center where these high-quality diamonds find their way to countries such as China, the United States (US), Dubai, and many other global destinations.

The Surat diamond industry, under the guidance of the Gems and Jewellery Export Promotion Council (GJEPC), has taken a bold step to offset overproduction by unanimously deciding to ban the import of rough diamonds, a vital raw material for diamond processing, particularly from mining giants like De Beers and Alrosa in Russia.

The move was spurred by the sharp decline in polished diamond prices on the international market. Recently, diamantaires in Surat protested and called for a boycott of the Rapaport Group, a prominent diamond pricing authority, for reducing polished diamond prices by 1% to 9% on its Rapnet platform. This dramatic price drop, attributed to economic slowdowns in the US, China, and the Russia-Ukraine conflict, has put immense pressure on the Surat diamond industry and its skilled artisans.

In response to these challenges, many small diamond units in Surat have declared an early Diwali vacation, while others are operating at reduced capacity, with some working as little as four to five hours a day.

However, the recent escalation of the Israel-Palestine conflict has cast a cloud of uncertainty over the fate of Surat’s diamantaires. Over 50 leading diamond companies from Surat and Mumbai maintain offices in Israel. These companies import polished diamonds of larger sizes to Israel for re-export to jewelry consumption markets around the world. The conflict has raised concerns about the impact on these vital business relationships.

Vipul Shah, chairman of GJEPC, emphasized the significance of the trade relationship with Israel, stating, “India has witnessed substantial exports of gem and jewelry to Israel, amounting to USD 1,279.76 million during the 2022-23 fiscal year. It is significant to note that Israel being a very important trading center also exports rough diamonds to the tune of USD 1,782.80 million. Israel primarily serves as a re-export market.”

“While the ongoing situation in Israel is of grave concern to us, we express our solidarity with the Israeli diamond trade during this hour of crisis for their nation. It is too early to definitively assess the impact, and we are keeping a strict watch on the situation. We have not witnessed any disruption in the regular dealings and believe it is unlikely to significantly impact India’s gem and jewelry trade with Israel. Nevertheless, we remain hopeful for a swift resolution and the return of peace in that very important geo-political and economic region.”