For households, the risk is immediate. “If the war continues beyond a week, the price of pulses will increase,” said Suresh Agarwal, president of the All India Dal Mill Association.
India imports about 5-6 million tonnes of pulses annually, including tur, urad and lentils, mainly from Myanmar, Canada and Africa, leaving kitchen budgets exposed to global shocks. A rise in logistics cost will increase the landing price for legumes, pushing up retail prices, which does not augur well for food inflation. However, rice prices could see a decline as exports to Iran and other Gulf countries could be hit.
The Indian Rice Exporters Federation has issued an advisory to its members not to undertake new CIF (cost, insurance and freight) commitments for Iran and Gulf countries. It recommended they conclude sales on FOB (free on board) terms so that freight and insurance and related risks remain with the international buyer.
Developments in Iran and the UAE can have an immediate impact on bunker (ship fuel) prices and, if oil prices rise, may also disrupt container and bulk vessel availability, said Dev Garg, VP, IREF. “Container and bulk freight could increase sharply at short notice, exposing exporters to losses on fixed delivered-price contracts. The situation may also lead to steep increases in insurance premiums,” Garg said.
“If the supply of rough diamonds and bullion comes to a halt, then our workers will suffer too as there will be no work for them. Exports to Dubai will also take a beating,” said Kirit Bhansali, chairman of the Gem & Jewellery Export Promotion Council (GJEPC).
Surat, the diamond cutting and polishing hub of the country, employs around a million people. Already, the gem and jewellery trade is facing headwinds due to the uncertainty over US reciprocal tariffs and tepid demand for cut and polished diamonds from the Chinese buyers.The current geopolitical tension in the Middle East has raised further concern for the trade.
India cuts and polishes 9 out 10 diamonds available globally.
“There will be a shortage of bullion in the market as Dubai is our second biggest supplier of gold. We have to wait and watch how things take shape in coming weeks,” Bhansali said.
In the calendar year 2025, India imported gold bars worth $16476.98 million, up by 28.47 per cent compared to 2024.
Rough diamond imports through Dubai, however, saw a marginal increase to $7445.12 million in 2025 as compared to $7407.15 million in 2024 as the demand for cut and polished diamonds from the US and China was less.
Exports of cut and polished diamonds to Dubai witnessed a 48.81 per cent increase to $2394.99 million in 2025, while plain and studded gold jewellery went up by 25.41 per cent to $6328.72 million.
The India-UAE Comprehensive Economic Partnership Agreement (CEPA) signed in 2022 has given a fresh impetus to the export and import of gem and jewellery between the two countries.
The CEPA agreement has created a conducive environment for Indian jewellers to expand their footprint in the UAE, a key global jewellery hub. The removal of import duties has enhanced India’s competitive edge, boosting long-term trade partnerships and ensuring continued growth in exports.
Bullion prices
Meanwhile, both gold and silver prices may show volatility on Monday when the global markets open.
“Gold and silver prices are set to remain highly volatile with a gap up on the opening session on Monday as the Middle East conflict involving renewed U.S. and Israeli military action against Iran — continues to dominate global risk sentiment.
This elevated geopolitical risk can drive investors toward traditional safe-haven assets like gold and silver, and widely expecting a gap-up opening for bullion markets,” said Jateen Trivedi, VP Research Analyst (Commodity and Currency) at LKP Securities
As global equities and risk assets come under pressure, capital tends to shift into precious metals, which act as a hedge against uncertainty. Earlier moves have already pushed gold and silver prices higher in recent sessions, and this momentum could continue if the conflict intensifies further, Trivedi added.