Iran-Israel Conflict Postpones Dubai Rough-Diamond Tenders, Disrupts Trade

Koin International and Trans Atlantic Gem Sales postponed rough-diamond tenders in Dubai as the Iran–Israel escalation spilled into the Gulf, interrupting the world’s largest rough-diamond trading hub and choking consignments bound for India’s polishing centre in Surat. Iran carried out bombing of sites in Israel, the United Arab Emirates and other Gulf countries in response to U.S. and Israeli strikes, and the immediate consequence was a halt to scheduled tenders and a sharp disruption of air logistics.

Dubai International Airport suffered damage during one attack and was shut down for 48 hours, though limited flights resumed last night. Airports across the UAE suspended passenger and cargo flights because of missile and drone strikes and airspace closures, and debris near airport zones forced many traders to stay indoors, with some taking shelter in bunkers. Finished goods worth "crores" of rupees are reported stuck at Surat and Mumbai airports and ports as cancelled cargo flights have frozen exports and imports.

Dubai’s concentration of rough trade magnifies the impact: the city has been the world’s largest rough-diamond trading hub since 2021, Dubai Multi Commodities Centre hosts many Indian diamond companies, Bhaskarenglish reports that Dubai handles approximately 60-65% of the world’s rough-diamond tenders, and industry accounts note Dubai has traded over one billion carats of diamonds in recent years. Those figures help explain why postponements by tender houses translate rapidly into fewer stones arriving at cutting benches in Surat.

Surat and Mumbai together export around 400-500 parcels daily and import approximately 250-300 parcels via Dubai, and bilateral flows are large: exports to Dubai in 2024-25 were USD 7,868.16 million while imports from Dubai were USD 11,000.51 million. On Israel links, exports to Israel from April 2024 to March 2025 were USD 548.27 million, with exports of USD 514.20 million between March 2025 and February 2026; imports from Israel in 2024-25 were USD 259.17 million. Dinesh Navadiya, described in different reports as a diamond trader and as Indian Diamond Institute Chairman, said: "Dubai is the world's largest trading market for raw materials. We import raw materials from there. Due to the war, export and import activities will face difficulties. If the conflict continues for a long time, the gems and jewellery sector will face a major impact."

Local leaders warn of immediate employment and production pain. Nikhil Madrasi, president of the Southern Gujarat Chamber of Commerce and Industry, said: “Israel is a major diamond trading hub. Instability there disrupts the supply of rough stones to Surat. With the U.S. involved, luxury demand could weaken further.… If this continues, employment in diamond units will be hit.” Industry reports already flag suspended exports, cancelled orders, and the prospect of salary cuts or layoffs in Surat’s manufacturing units.

The crisis is not confined to diamonds. Damage to Dubai’s airport and mid-transit rerouting has affected bullion logistics; Kitco said airport disruption "has introduced a rarely discussed friction into bullion markets: physical delivery," and added, "Traders reported scrambling to reroute consignments mid-transit…. The disruption, even if temporary, highlights a structural vulnerability in gold’s global logistics network at precisely the moment when demand is spiking." Gold prices shot past $5,400 after initial U.S. air strikes and were trading at just over $5,000 at press time. As the trading system strains, analysts note that "Digital settlement platforms gain importance during physical disruption periods, enabling continued trading activity even when delivery mechanisms are constrained. However, regulatory frameworks for these alternatives remain evolving in many jurisdictions."

With Dubai handling a majority share of rough tenders and Surat reliant on daily parcel flows of 400-500 exports, the industry faces a narrow window to reroute supply chains before production, cash flow and employment in India’s diamond belt register lasting damage.