SGCCI flags economic fallout

Surat: Escalating tensions involving the US, Israel and Iran in Western Asia have triggered global economic uncertainty, which is beginning to impact major industries in Surat and south Gujarat, officials of the Southern Gujarat Chamber of Commerce and Industry (SGCCI) said on Sunday.SGCCI president Nikhil Madrasi said Surat's diamond industry is already facing a slowdown and the ongoing conflict could worsen the situation. Israel, a key global hub for diamond trading, plays a crucial role in the supply of rough diamonds to Surat, and instability there is directly affecting availability, he said.Madrasi added that with the US involved in the conflict, demand for luxury goods in the American market could weaken, impacting exports of diamonds and jewellery. He also pointed out that restrictions on Russian rough diamonds, coupled with rising freight and insurance costs due to disruptions in Red Sea shipping routes, have increased production costs for diamond manufacturing units."If the situation continues, employment in the gem and jewellery sector could be affected," Madrasi warned. He further said global uncertainty and volatility in the dollar-rupee exchange rate could pose additional challenges for exporters.Textile costs set to rise Commenting on the textile sector, SGCCI vice-president Ashok Jirawala said Surat's textile industry is particularly vulnerable as it is largely dependent on polyester and man-made fibres (MMF), which are derived from petroleum products. He warned that escalating tensions in the Middle East could push crude oil prices higher, leading to a 15–20% increase in yarn and raw material costs in the short term.Jirawala said Dubai and other Gulf countries act as major trading gateways for Surat's textile exports, and the current geopolitical situation has already resulted in shipment delays. He also flagged concerns over payment security from overseas buyers.