Rising tensions involving the United States, Israel and Iran in Western Asia are creating global economic uncertainty that is beginning to affect key industries in Surat and south Gujarat, according to the Southern Gujarat Chamber of Commerce and Industry. Officials warned that the diamond sector, already experiencing a slowdown, could face deeper challenges as instability in Israel disrupts the supply of rough diamonds.

The involvement of the United States in the conflict may weaken demand for luxury goods, affecting exports of diamonds and jewellery. Industry leaders also highlighted higher production costs due to restrictions on Russian rough diamonds and increased freight and insurance expenses linked to disruptions in Red Sea shipping routes. Continued volatility in currency exchange rates could add further pressure on exporters and potentially impact employment in the gem and jewellery sector.

The textile industry is also at risk, as it depends heavily on polyester and man made fibres derived from petroleum products. Escalating tensions in the Middle East could drive up crude oil prices, leading to a projected 15 to 20 percent rise in yarn and raw material costs. Shipment delays through Gulf trading hubs and concerns over payment security from overseas buyers are adding to the sector’s challenges.