The Middle East conflict has disrupted India's gems and jewellery exports, as well as imports of rough diamonds from the ​United Arab Emirates, because of widespread flight cancellations and airspace closures.

Dubai, ‌a major global hub for polished and rough diamonds and bullion, has suspended numerous cargo and passenger flights, affecting trade flows and shipments of both exports and essential ​raw materials, industry officials said.

"Exports and imports from the Middle East ​have come to a standstill, and there are no logistics ⁠in place to move goods," Vipul Shah, managing director of Asian Star, ​a leading diamond exporter, told Reuters.

The Middle East accounts for nearly a quarter ​of India's annual gems and jewellery exports of around $30 billion, while the United Arab Emirates makes up more than two-thirds of the country's rough diamond imports.

The country's gems and jewellery exports will fall in March as Dubai is ‌not ⁠only a major market for gems and jewellery, but also a key intermediary between diamond-producing countries and major consumer markets, said Shaunak Parikh, vice chairman of the Gem and Jewellery Export Promotion Council.

"If it (the conflict) drags on, ​it could hurt ​demand,” Parikh said.

India ⁠has been relying on demand from the Middle East after its top buyer, the United States, imposed hefty tariffs ​on Indian goods last year and curtailed purchases.

Overseas buyers ​are cautious ⁠about placing orders amid volatility in the rupee–U.S. dollar exchange rate and logistical constraints, said Colin Shah, managing director of Kama Jewelry.

The Indian rupee fell to a ⁠record ​low of 92.3025 per U.S. dollar on ​Wednesday.

Both buyers and sellers know the war has disrupted trade, so they are agreeing to delay ​shipments, said a Mumbai-based diamond exporter.

Courtesy : AOJ Desk News