Israeli Diamond Industry Hits Historic Low as Export President Resigns
Israel's diamond export industry is experiencing an unprecedented collapse, with cumulative exports from the start of 2026 through June totaling only $2.4 billion, the lowest in the sector's history. This marks a sharp decline from the peak year of 2015, when polished diamond exports reached approximately $7 billion, more than triple the current volume. Overall trade in the industry, including raw diamond imports and polished diamond exports, has fallen to around $4 billion, down from about $12 billion during its peak years.
Natalie Gutman, the diamond sector supervisor, described the situation as unprecedented, noting that current trade volumes are just one-third of what they were a decade ago. Since 2022, the industry has faced a steady decline, impacted by global market crises, the rise of Dubai as a major trade hub offering significant tax advantages, and the increasing prevalence of lab-grown diamonds, which are much cheaper than natural stones. Additionally, a 10% U.S. import tariff on diamonds, imposed by President Donald Trump and effective from July 26, has dealt a severe blow to the industry, as the U.S. accounted for about 20% of Israel's diamond exports.
In response, Israel is negotiating with the U.S. administration to reduce these tariffs and is also seeking tax relief measures domestically to support the industry. Meanwhile, global demand is also waning, as evidenced by De Beers, the diamond giant, which is facing declining sales and is reportedly up for sale for the first time in its history. Changing consumer preferences, especially among younger generations favoring experiences over diamond jewelry, and reduced demand in China due to government policies, contribute to the downturn.
Amid this crisis, Nissim Zohar, president of the Israel Diamond Exchange, announced his resignation after two years in office. He warned that if conditions do not improve, the Israeli diamond exchange could cease to exist, with companies relocating operations to Dubai or Belgium, where tax incentives are more favorable. Zohar criticized Israel's tax policies and lamented the lack of support, emphasizing the catastrophic decline and his own plans to move his private business abroad if necessary. Following his resignation, the diamond exchange elections are expected to be moved up to November.
