The ongoing US-Iran war is casting a shadow over the gem and jewellery industry, with trade players bracing for possible disruptions in supply chains, logistics and consumer sentiment.
While the full extent of the impact remains uncertain, the Middle East conflict – which intensified over the weekend preceding the Hong Kong International Diamond, Gem & Pearl Show (HKDGP) – heightened the uncertainty in a market already reeling from trade tensions and other geopolitical challenges.
Greater instability
Across the industry, many stakeholders are adopting a cautious, wait-and-see approach. While the conflict may not always directly affect all businesses, they acknowledged the toll this would take on supply chains and market confidence, among others.
Damien Cody, president of the International Colored Gemstone Association (ICA), conceded that geopolitical tensions create a challenging environment for luxury goods.
While the US-Iran war will not directly affect the supply of coloured gemstones, it could dampen consumer sentiment. “For someone to buy a discretionary item like a gemstone, they need to feel good about their circumstances. If people are worried about stocks, shares or global instability, demand could slow down,” Cody explained.
He however remained optimistic about the long-term prospects for coloured gemstones, citing pent-up demand that is driving strong enquiries and potential sales.
“We will need to wait and see how this plays out. Obviously, we prefer if there were no conflicts, but we are still very hopeful of a much better 2026 and 2027,” said the ICA official.
Kavi Agarwal, director of coloured gemstone manufacturer Iskkon, also pointed to the war’s impact on market confidence. “We are an industry that depends on disposable income. In uncertain times, people tend to hold on to their money. We need to see how this will eventually impact the business,” he disclosed.
Meanwhile, George Kakuda, president of the Japan Pearl Exporters’ Association (JPEA) and CEO of Kakuda Pearl Co Ltd, noted that the US-Iran war is a cause of concern but there were no immediate effects on the pearl sector. In fact, buyers continue to aggressively source pearls at the ongoing HKDGP.
Patrick Khunt, director at Hini Star Ltd, said escalating tensions in the Middle East are creating more uncertainty in an already challenging environment.
“It is a very tough time,” he said, noting that wild swings in gold prices have added to the sense of instability. Customers are similarly on edge, with buyers at the March show slashing budgets and focusing on commercial goods.
Visitor traffic included buyers from India, China, the US and Russia. Despite this mix, he said sentiment has turned sharply cautious. “Everyone came here in buying mode. But when the war happened, people said no – they did not want to buy. They prefer to wait and see,” he observed.
The Middle East, particularly the UAE, has been one of only two consistently strong markets for the diamond and jewellery trade alongside the US. According to Khunt, the Middle East accounts for around 20 to 30 per cent of Hini Star’s sales.
He also underscored the pressure on margins and the challenge of navigating a market where geopolitical risk, sentiment shock and excess inventory now collide.
Murky resolution
The outbreak of the US-Iran war further complicates the outlook for the gem and jewellery industry.
Patumna Boonsirirutchoke, export officer of Thailand-based corundum specialist World Gemstone Co Ltd, shared that 2026 had started strong, with robust demand from India and Japan. Recent developments have, however, cast a pall over growth prospects.
“Not only will this conflict disrupt supply chains and logistics, but it also affects major trade markets that many companies had been relying on for growth,” she said.
Aditya Tank, partner at Tank Fine Gems, echoed these concerns, emphasising the Middle East’s importance as both a consumption and supply hub. “The business has become incredibly uncertain, from supply constraints to changing consumer trends and geopolitical tensions,” he said. “We can only wait and see how these developments pan out.”
Shreyans Dholakia, brand custodian of Shree Ramkrishna Exports Pvt Ltd, noted that geopolitical incidents often disrupt trade dynamics. “The situation was stabilising with India, especially with the trade deal with the US, but that has now been put on the backburner,” he said, predicting disturbances over the next five to six months.
Fallout
Industry players are also wary of the conflict’s ripple effects. Some HKDGP exhibitors reported that a few of their regular customers from Europe were unable to attend the fair due to travel disruptions. Others told JNA their business was indirectly affected as their clients focused primarily on the Middle East market.
Indeed, not everyone has emerged unscathed, with some directly hit by the war’s repercussions.
Hong Kong-based Ally Jewellery, which relies on the Middle East for 60 per cent of its business, has been significantly affected. “The Middle East market has come to a near standstill. Clients are unable to attend the ongoing Hong Kong International Jewellery Show, and we cannot ship orders. Everything is on hold,” said company director Issac So.
Similarly, Turkey-based Ararat Jewellery said business with the Middle East, traditionally a strong market for the company, has slowed considerably due to ongoing conflicts, travel restrictions and shipping disruptions. “If we cannot ship goods, it impacts our business greatly,” said Arden Erkol, the company’s Export Sales manager.
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