Israel’s diamond industry is grappling with a significant downturn, marking a historic low in exports. The resignation of the Israel Diamond Exchange’s president compounds the crisis, drawing attention to the challenges facing this once-thriving sector.
Declining Export Figures
Recent data from the Diamond Controller’s Office reveals that Israel’s diamond exports for the first half of 2026 have reached only $2.4 billion, a stark contrast to the sector’s peak in 2015, when polished diamond exports approached $7 billion. This decline highlights a troubling trend, as total trade in the diamond industry—which includes both imports and exports—has fallen to around $4 billion compared to about $12 billion in more prosperous times. Diamond Controller Natalie Gutman emphasized the severity of the situation, noting that the trade volume is now merely one-third of what it was just a decade ago. This consistent downward trajectory since 2022 signals an unprecedented crisis in the industry.
Factors Behind the Downturn
Several factors contribute to this downturn. The emergence of Dubai as an international trading hub, enhanced by favorable tax policies, has attracted many Israeli dealers. Additionally, the rising popularity of lab-grown diamonds has intensified competition, as synthetic stones are available at much lower prices than their natural counterparts. This shift in consumer preference, especially among younger buyers, indicates a trend where spending is increasingly directed toward experiences rather than luxury goods like diamond jewelry.
Moreover, the impact of changing global economic dynamics cannot be overlooked. New tariffs imposed by the U.S. on diamond imports have further strained Israeli exporters. The U.S., previously a major market for Israeli diamonds, has seen decreases in trade volume, exacerbating the difficulties faced by the local industry. Efforts are underway to negotiate relief from these tariffs, as stakeholders engage with the U.S. administration and the Finance Ministry in Israel.
The Future of the Diamond Industry
The outlook for the Israeli diamond industry remains uncertain. Although Gutman stated that Israel still holds advantages, such as established client relationships and expertise in polishing large and colored stones, the looming challenges may overshadow these benefits. Nissim Zuaretz, the outgoing president of the Israel Diamond Exchange, articulated concerns about the future. He noted that without urgent reforms to improve the competitive landscape, the Israeli diamond trading community could face severe ramifications, including potential closure.
The industry’s difficulties mirror broader market trends, as seen in the struggles of major players like De Beers. The reduction in diamond sales—down 13% in 2025—reflects not only local but also global shifts in consumer behavior and economic conditions.
In summary, Israel’s diamond trade is at a crossroads, where historical lows in exports coincide with leadership changes and challenges posed by both domestic policies and international market dynamics. If proactive measures to revitalize the sector are not embraced soon, the long-term viability of the Israel Diamond Exchange may be severely jeopardized.