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The Role Of Diamond Trade Between Israel And The UAE

In 2021, Israel shipped $188 million in raw diamonds to the UAE, and that figure is expected to rise after the two countries inked a free trade agreement in June.

On September 17, 2020, just two days after the Abraham Accords were signed in Washington and Israel and the UAE established diplomatic relations, the Israel Diamond Exchange (IDE) and Dubai Diamond Exchange (DDE) signed a cooperation agreement. The agreement called for the IDE and DDE to open offices in each other's headquarters and to promote bilateral trade and joint projects.

Prakash of Manora village is one such guy who discovered a 3.64 carat diamond from the Panna diamond mine but failed to find a buyer. He told the Free Press that his diamond is up for sale and that it would most likely be sold at the next auction for a large price. He stated that the next auction will be held in three months. He added that in the past, he had discovered at least nine to ten diamonds, which fetched exorbitant prices at auction. The proceeds from the diamond auction enabled him to purchase two tractors, agricultural land, and build a luxurious home.

The speed with which the agreement was reached reflected the eagerness with which the world's two leading diamond exchanges embarked on a new era of collaboration. It also reflected another, less-publicized fact: that long before official ties were established between Israel and the UAE, business figures from both countries were linked by the trade in precious stones. One could even argue that the Abraham Accords paved the way for open economic cooperation between Israel and the Emirates.

The diamond industry is a long-established significant part of Israel's economy, dating back to the founding of the state. For generations, the trade in precious stones drew Jewish merchants from the dispersion who needed a generally acknowledged, readily transportable money. Jewish dealers from Germany immigrated to then-pre-state Israel in the 1930s, bringing their expertise in polishing and trading precious stones with them. The IDE was founded in the 1960s in the Tel Aviv suburb of Ramat Gan and now has 3,100 members, with cut and polished diamonds accounting for approximately 23% of Israeli exports.

The diamond industry is a long-established significant part of Israel's economy, dating back to the founding of the state. For generations, the trade in precious stones drew Jewish merchants from the dispersion who needed a generally acknowledged, readily transportable money. Jewish dealers from Germany immigrated to then-pre-state Israel in the 1930s, bringing their expertise in polishing and trading precious stones with them. The IDE was founded in the 1960s in the Tel Aviv suburb of Ramat Gan and now has 3,100 members, with cut and polished diamonds accounting for approximately 23% of Israeli exports.

The UAE is a younger player in the global diamond industry, but it has made significant strides in the recent two decades. Dubai's position as a pre-eminent regional trading hub and magnet for luxury global tourism, as well as its proximity to Asian precious gem production centers, have made it a natural centre for the industry. The Dubai Multi Commodities Centre (DMCC) established the DDE in 2002, and it now has over 1,100 licenced companies. It now handles roughly $25 billion in total trade, more than double the amount handled by Israel's IDE.

Following the Abraham Accords, the diamond industry of Israel and the UAE have swiftly advanced. In late 2020, the DMCC will open a representative office within Ramat Gan's IDE, and the IDE did the same in Dubai's DMCC this February. In 2021, Israel exported $188 million in rough diamonds to the UAE, and that figure is expected to rise after the two countries signed a free trade agreement in June, eliminating customs duties on 95% of products and lowering tariffs on diamonds and precious gems from 5% to 0%.

And it's possible that the diamond trade's role in foreshadowing Israel-UAE ties will be mirrored elsewhere. Although Israel and Qatar do not have official diplomatic relations, the two have reportedly agreed to allow Israeli diamond traders to do business in a new free trade zone for precious stones and gold in Doha, similar to Dubai's DMCC. As a result, the glittering diamond-paved path to the Abraham Accords may end up extending even further in the Gulf.

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