How West Asia trade disruptions are affecting India’s gems and jewellery exports

Disruptions across West Asian trade routes are slowing India’s gems and jewellery exports and pushing up logistics costs, even as underlying global demand remains stable, industry experts said.

The West Asia’s role as a key transit hub has amplified the impact of airspace closures and route constraints. Exporters are reporting delays in shipments and order fulfilment, along with a sharp rise in freight and insurance costs as cargo is rerouted.

For an industry with annual exports of about $30 billion, these disruptions are beginning to reflect in slower shipment cycles and tighter working capital.

Arthi Ramalingam, Founder and CEO, Eternz, said the current situation is affecting execution timelines rather than demand fundamentals.

“The disruption is expected to impact the pace of exports more than demand itself. Delays in shipments and extended fulfilment cycles could lead to short-term revenue volatility and pressure on working capital,” she said, adding that the challenge remains operational in nature.

Air cargo disruptions and currency volatility are adding to uncertainty, particularly for high-value, time-sensitive shipments.

Colin Shah, MD, Kama Jewelry, said multiple factors are weighing on exporters.

“Airspace closures are disturbing cargo routes across the Middle East, while volatility in dollar rates is leading to unpredictability in exports. Insurance costs for shipments have risen three to four times, impacting margins,” he said.

He added that overseas buyers are adopting a cautious approach to deal closures until logistics stabilise.

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Despite these pressures, demand-supply dynamics remain broadly balanced.

Industry experts said inventory levels are sufficient to meet current demand, limiting the risk of a sharp near-term demand slowdown.

On pricing, the impact remains uneven.

Domestic gold prices continue to track international benchmarks, which limits the immediate pass-through of higher logistics costs. However, diamonds and finished jewellery, where supply chain costs account for a larger share of value, could see some pressure if disruptions persist.

Demand across key export markets remains mixed but intact.

The US continues to anchor demand, while the West Asia is witnessing temporary softness linked to logistical constraints rather than a decline in consumption.

In the near term, exporters are expected to face slower shipment cycles, higher costs, and margin pressure.

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