The conflict in the Middle East is expected to impact gems and jewellery exports in the April-June period of this financial year as demand is expected to weaken, the export promotion body for the sector said Monday.

The Middle East along with the US is the biggest market for India;s gems and jewellery exports. The region accounts for 35-40% of India’s gems and jewellery exports which were $ 32.2 billion in 2023-24, 14.45% lower than the previous year.

The US also takes in 35-40% of gems and jewellery exports from India.

Within the sector, cut and polished diamond exports declined 27.58% to $ 15.9 billion largely due to disruption in supplies of raw diamonds from Russia following sanctions, Gems and Jewellery Export Promotion Council (GJEPC) said. In the last 18 months raw diamond supplies from Russia have dried up and the industry’s dependence on alternate sources like Antwerp, Israel and Middle East.

“GJEPC is discussing with global diamond miners to increase investments in enhancing generic promotion of diamonds and diamond jewellery in the US, China, Middle East including India,” chairman of GJEPC Vipul Shah said.

While polished diamond exports have suffered, the free trade agreements with the United Arab Emirates (UAE) and Australia have aided plain gold jewellery exports which have grown 61.72% to $ 6.7 billion in the last financial year.

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Plain gold jewellery exports to UAE grew 107.2% to reach $ 4.5 billion in FY 2023-24. UAE and Bahrain accounted for over 85% of India’s plain gold jewellery exports. Australia also witnessed a growth of 37% in plain gold jewellery exports.

Gross export of total Gold Jewellery – both plain and studded – grew 16.75% to $ 11.2 billion last FY.

“With the objective to tap and penetrate new markets, GJEPC made concerted efforts to explore new markets through delegations to Vietnam and Cambodia. Now a delegation to Latin American countries is planned in May to give fillip to exports.”

This year, GJEPC is participating in a total of 15 international shows across different parts of the world. In May-end the largest jewellery show of the US will take place that will hopefully mark the turnaround of US exports, Shah added.