India’s gem, jewellery sector aims to increase domestic sales by up to 15% in 2026 to offset war impact on exports

With the escalating crisis in West Asia, India’s gem, jewellery and diamond sector finds itself at a critical crossroads, as exports worth $1.5 billion to $2 billion are estimated to be at risk, with important shopping and destinations, including Dubai, facing unprecedented trade disruptions.

Sabyasachi Ray, executive director of Gem and Jewellery Export Promotion Council (GJEPC), the industry apex body, told The Hindu that the industry and trade body are doing everything possible to increase domestic consumption and sales at least by 10 to 15% during calendar year 2026 in order to offset the possible impacts of the war on exports. Mr. Ray was here in Bengaluru to participate in GJEPC’s annual expo.

Responding to a query on how the closures or restrictions of airspace and ports in Israel, Qatar, and UAE are affecting the daily movements of up to 500 diamond parcels flown between Surat, Mumbai, and Dubai, Mr. Ray said that although air cargo movement has not been significantly disrupted, the key impact has been reduced buyer presence in trading hubs like Dubai. “As a result, diamond parcels are being redirected. Non-Russian goods have largely shifted to Antwerp, while some trade has moved to India, Hong Kong, and Singapore,’’ he said.

On rising freight and insurance costs owing to logistics rerouting, he said, Indian exporters are facing margin pressure as trade has shifted from cost-effective hubs like Dubai to more expensive destinations such as Antwerp, Hong Kong, and Singapore. “While airfares remain relatively stable, insurance costs have risen significantly. For instance, shipping goods from Dubai to Hong Kong can cost around $3,000. Overall, these factors are expected to increase costs by 5–10%, contributing to an estimated $1.5 billion impact over the next three months,’’ he cautioned.

According to Mr. Ray, earlier, NRI and South Asian demand was serviced through Dubai. Now, exporters must target these markets directly. Key alternative hubs include Singapore, Australia, India, and New York, along with emerging routes via regions like Egypt.

Explaining how important gold is for individual investors, especially during market down-times like war, Mr. Ray said, “Gold is considered one of the safest investments during periods of uncertainty. When financial assets or real estate become unstable or risky, investors turn to gold due to its liquidity, portability, and universal acceptance.’’

He further stated that because gold can be easily sold anywhere, at any time, historically, during wars and crises, people have relied on gold to preserve wealth. When stock markets underperform and currencies become volatile, gold typically gains value, making it a preferred safe-haven asset, he elaborated.

Mr. Ray also said that to increase sales by 10 to 15% in 2026 in the domestic market, the trade body is looking at IIGS (India International Jewellery Show) as one of the platforms that would bring consolidation in the market. GJEPC has recently collaborated with De Beers to make Indra (Indian Natural Diamond Retailers Alliance) and through this alliance, more diamond jewellery can be sold. “With the World Gold Council, we are trying to see that the market expands for gold jewellery,” he noted.

“We are increasing the sale promotion in a huge way in India through Natural Diamond Promotion Foundation, a new entity. That will kick in from June or July this year,’’ Mr. Ray added.