The jewelry industry has proposed turning Istanbul into a global trading hub as instability in the Middle East disrupts business in Dubai, where more than 20% of the world’s gold trade takes place.
Ayhan Güner, Vice Chairman of the Mücevher İhracatçıları Birliği (Jewelry Exporters’ Association), said the conflict involving the United States and Israel against Iran has severely affected the jewelry trade in Dubai.
He called on policymakers to think more strategically instead of imposing quotas and additional taxes on the sector.
“Rather than placing quotas and taxes on the jewelry industry, we should think bigger. Istanbul could become the world’s gold and jewelry center,” Güner said.
Debate Over Diamond Tax Proposal
Güner made the remarks while responding to a proposal to introduce a 20% Special Consumption Tax (ÖTV) on diamond imports used as raw materials in jewelry production.
He rejected claims that diamonds are tax-free in Turkey, stating that both domestic production and imports of diamond jewelry are already subject to taxation.
According to Güner, Turkey strengthened its position in global diamond jewelry manufacturing after the opening of the Istanbul Diamond Exchange in 2014.
The sector aims to increase jewelry exports—already one of Turkey’s most valuable export categories—to between $20 billion and $30 billion annually.
Tax Measures Could Harm Production and Employment
Güner warned that introducing a 20% tax on rough diamonds used in production could seriously damage the sector.
He said the jewelry industry once employed over 250,000 people, but employment has already declined due to production quotas. The industry had been planning to create more than 100,000 new jobs, while over 50,000 workers are currently employed in diamond jewelry manufacturing and retail.
According to Güner, diamond jewelry imports into Türkiye already face a 47.5% tax, which helped support domestic production and exports. However, taxing raw materials used in manufacturing would effectively tax production rather than consumption, he argued.
War Disrupts Regional Jewelry Trade
Güner noted that 43% of Turkey’s jewelry exports go to countries directly affected by the ongoing conflict in the Middle East.
In 2025, Turkey exported $7.9 billion worth of jewelry, with $3.38 billion—about 42.8%—sent to 18 countries in the region.
He said trade with these markets has largely halted due to war, instability, and logistical disruptions.
“At the moment, not only is it difficult to send goods to these countries, but even people who were there are struggling to return home,” Güner said.
Tourism and Retail Sales at Risk
Güner also highlighted the importance of tourism to jewelry sales.
He said around 25% of diamond jewelry sold in Turkey is purchased by tourists, particularly in destinations such as Antalya, which hosts some of the world’s largest luxury resort hotels.
According to Güner, introducing additional taxes could make it difficult to sell jewelry both to international customers and in export markets, potentially pushing buyers to purchase abroad or through informal channels.
Proposal: Make Istanbul a Global Gold and Jewelry Hub
Güner argued that instead of restricting the sector, Turkey should aim to become a global center for gold and jewelry trade.
He noted that Dubai currently acts as a major hub where African gold is brought and integrated into the global market.
With regional disruptions affecting the Gulf, Güner suggested that Istanbul could fill the gap thanks to its existing infrastructure, including the Borsa İstanbul Precious Metals Market and the Istanbul Diamond Exchange.
“Instead of putting pressure on a sector that employs tens of thousands of people, we should take steps to make Turkey the center of global gold and jewelry trade,” he said.
Güner added that capturing opportunities in the global jewelry market worth over $300 billion could bring significant economic benefits to Turkey.
Source: Patronlar Dünyası/ Prepared by: İlayda Gök