Exports fell so much in March (by 35.23% compared to the year before) because of the problems in the US and Iran. Shipping routes and air routes over the area became very risky. According to the GJEPC, shipments going to countries in the Gulf region and elsewhere were delayed. Especially diamonds had trouble getting through customs and during transport, meaning they weren’t delivered on time and cost more to handle.
Exports fall sharply in March as West Asia tensions disrupt logistics
Insurance for goods going through or near where the fighting is happening rose sharply. This made exporting things as usual unprofitable for many businesses. Smaller exporters, who don’t have a lot of extra money, were the first to feel this, and some of them put off sending out shipments to avoid the high insurance fees.
This immediately caused a big drop in monthly sales, and usual seasonal buying patterns and how long it takes to get from making to selling the jewelry made the problem even worse. Buyers in the most important markets also weren’t sure what to do and so cut back on orders or waited to buy until things were more predictable.
A large part of the drop in sales came from cut and polished diamonds. In March, sales of these diamonds were $838.75 million, down from $1,156.60 million the year before (based on initial numbers). Over the entire year, this type of diamond also saw a decrease in sales of 8.52%.
Impact on diamonds, insurance costs and shipments
The diamond trade needs to be safe and fast, and needs to have the money to support it, and if anything goes wrong with either of those, the effects are felt throughout the whole process. When insurance companies decide a route is dangerous, insurance gets very expensive, reducing how much money companies make and leading them to find a different route or delay sending their goods.
Diamond cutters and smaller manufacturers who regularly receive diamonds said their production slowed down. Some companies began using their backup plans, which included using different ports, paying for their own private planes when they could, and asking buyers to be flexible with delivery dates.
Despite the big fall in March, total exports of gems and jewelry for fiscal year t2025-26 only went down by 3.32% to $27,717.40 million (compared to $28,669.53 million the year before). The fact that the yearly drop wasn’t huge shows that demand in many markets is still strong.
FY26 performance: marginal dip, bright spots in silver jewellery
Sales of gold jewelry stayed about the same, with $11.36 billion worth of gold jewelry being exported – the same as the previous year. This steadiness helped to make up for the declines in other types of jewelry and in certain areas.
Silver jewelry was a bright spot, with a 52.21% increase in sales in fiscal year 2026 to $1,467.47 million. This shows people are still buying more affordable luxury items and a variety of unique silver jewelry designs in countries buying from India.
People leading the industry think these difficulties could lead to a change in strategy that is good for India. With help from the government, India could become a more important center for trading rough diamonds, and companies that now use places elsewhere would come to India.
Opportunity: push to become rough diamond trading hub
Companies in the United Arab Emirates have already said they’d like to start rough diamond trading businesses in India. India already has a lot of places to polish diamonds and a skilled workforce, so it’s a good place to do more of the earlier stages of the diamond business.
To become a clear and open trading center, India would need clear rules, good systems to make sure things are done correctly, and easier shipping. With the right mix of incentives and infrastructure, India could make the supply chain shorter and rely less on other countries to move goods.
The leaders of the GJEPC expect the issues with the US and Iran to improve in a few months, and they think exports will go up once shipping routes are safer. In the meantime, exporters will likely try to sell to more different countries to avoid being too reliant on a single one.
Outlook and policy steps needed
Things the government could do to help sales go up include making customs procedures easier, temporarily helping with insurance costs, and giving rewards for trading rough diamonds and adding value to them within India. Clear ways to get money for exports and ways to lower risk would also help companies deal with short-term problems.
At the moment, the industry is carefully watching things but also taking action, balancing backup plans with longer-term plans to change how India is involved with the world’s gem and jewelry markets.
