Key points
- What is certain is that the move signals a renewed determination to position Israel as a modern powerhouse in the global gems industry.
- According to Smotrich, the advantages of such a move far outweigh the disadvantages, even if it means a reduction in tax revenues.
- Whether the benefits outweigh the risks will depend on execution, international response, and how quickly Israel can reestablish itself as a magnet for global diamond traders.
Gems and Jewelry News: Finance Minister Pushes Industry Reform
Israel’s Finance Minister Bezalel Smotrich is setting the stage for a dramatic shift in the nation’s diamond trade. He revealed plans to make Israel a free-trade zone for diamonds as part of the 2026 national budget. The announcement was made during his visit to the Israel Diamond Exchange (IDE), where its president, Nissim Zuaretz, has been advocating for this transformation. According to Smotrich, the advantages of such a move far outweigh the disadvantages, even if it means a reduction in tax revenues. This Gems and Jewelry News report highlights how the proposal could reshape Israel’s jewelry sector at a time when the market is facing significant headwinds.
Israel pushes forward with plans to transform its diamond trade sector
Image Credit: StockShots
Diamond Exchange Pushes for Global Competitiveness
IDE president Zuaretz has long argued that Israel needs to revive its position as a key hub for rough diamond sales and polished trade. Inspired by Dubai’s success with its free-trade model, he envisions a system with sweeping tax exemptions and removal of import and export duties, currency controls, and corporate taxes. Such a model, he says, would not only attract global players but also create jobs and stimulate fresh trading activity for Israelis. If realized, Israel could regain momentum in the international market where Dubai has rapidly grown as a global leader.
Exports Declining Despite Industry Importance
The diamond sector remains vital, representing roughly 8% of Israel’s total exports in 2024, valued at around 13 billion shekels. The United States, Hong Kong, and Dubai are its primary buyers. Yet official figures reveal a troubling decline: rough imports fell 13.1% last year, polished imports dropped nearly 33%, while exports of rough and polished stones sank by 24.1% and 35.7% respectively. Industry insiders warn that without structural reforms, Israel risks losing its once dominant role in the global diamond supply chain.
A Strategic Gamble for the Future
Transforming Israel into a duty-free diamond hub is both a bold and risky gamble. On one hand, it offers a chance to breathe new life into a struggling industry, attract foreign investment, and counter competition from rival markets. On the other, the state faces the loss of tax revenues in an already challenging economic climate. Whether the benefits outweigh the risks will depend on execution, international response, and how quickly Israel can reestablish itself as a magnet for global diamond traders. What is certain is that the move signals a renewed determination to position Israel as a modern powerhouse in the global gems industry.
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