Middle-East Set to Become the New Global Gem and Jewellery Global Hub

Gems News: Tariffs Reshape the Global Jewellery Supply Chain

A seismic shift is underway in the global gem and jewellery industry after the recent announcement of steep new tariffs by former US President Donald Trump. India, long considered the beating heart of the diamond and jewellery polishing trade, is now facing a crushing 50% tariff on all exports to the United States. In response, many of India’s top jewellery houses and gemstone processing companies are rapidly relocating parts of their operations to the Middle East, particularly the Gulf states, where the governments are offering lucrative incentives for foreign manufacturers to set up shop. This Middle-East Gems and Jewellery news report notes that free trade zones, low taxation, and purpose-built jewellery manufacturing hubs in cities like Dubai, Doha, and Manama are luring industry giants eager to bypass punitive tariffs and keep their hold on the US market.

The Middle-east will emerge as the next Global Gems and Jewellery hub
Image Credit: StockShots

Thailand and Europe Also Feeling the Pinch

It is not just India that has been caught in the crossfire of the tariff war. Thailand’s vibrant jewellery export sector, renowned for its craftsmanship and colored gemstone expertise, has also been hit hard. The United States has imposed a 19% tariff on jewellery products from Thailand, significantly reducing competitiveness in a market where price sensitivity is already high. European jewellery exporters face a similar predicament with a 15% tariff, forcing many to rethink their supply chains and explore alternative production bases. America remains the largest jewellery market in the world, alongside the Middle East, making access to it critical for global jewellery brands and wholesalers.

The Gulf Advantage

In stark contrast, all Gulf countries have only been subjected to a modest 10% tariff increase on jewellery exports to the US. This creates a substantial competitive advantage for manufacturers based in the region. Gulf governments are seizing the moment, rolling out aggressive investment packages, free trade agreements, and infrastructure development plans aimed at positioning the Middle East as a world-class gem and jewellery manufacturing hub. With state-of-the-art polishing facilities, high-security trading centers, and favorable banking conditions, the Gulf could soon rival — or even surpass — traditional leaders like Surat in India and Bangkok in Thailand.

Major Players Already on the Move

Industry insiders confirm that some of India’s largest exporters have begun shifting polishing workshops and jewellery assembly lines to free zones in the UAE and Bahrain. These facilities are not only closer to major shipping routes but also benefit from advanced logistics systems that reduce transit time to the US and Europe. The move is also attracting skilled migrant artisans from India, Sri Lanka, and the Philippines, who are relocating to Gulf states to work in these expanding production hubs.

What This Means for the Global Jewellery Market

This strategic migration of manufacturing could change the balance of power in the jewellery trade for decades. The Middle East’s emergence as a manufacturing center will likely lead to increased competition for established players in Asia and Europe. The potential for direct access to both the American and regional luxury markets is pushing more brands to consider the Gulf as their new operational base. This, in turn, could accelerate investment in technology, design innovation, and marketing strategies tailored to affluent Middle Eastern consumers — a demographic that already has one of the highest jewellery spending rates in the world.

The ongoing tariff shifts are more than just a political maneuver — they are a structural force reshaping the jewellery industry’s geography. By capitalizing on low tariffs, business-friendly regulations, and strategic location, the Gulf is poised to cement itself as the next epicenter of the global gem and jewellery trade. While the short-term disruption will be painful for some exporters, those who adapt quickly may find themselves in a stronger, more competitive position in the years ahead. For now, the race is on to secure a foothold in what could become the jewellery industry’s most important new frontier.

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