Diamond Industry of Surat loses glitter as downturn deepens

Special Correspondent (New Delhi):In the labour-intensive sector, more than 15,000 people have been laid off in the past few weeks. Surat, India’s diamond hub is facing problems as the economic slowdown increases day by day. In the past few weeks, the labour-intensive sector is losing shine resulting in multiple factors. Including liquidity home crisis, the trade war between China and US, and Good and services related issues.

Almost one lakh people who are working in the factories of cutting and polishing diamonds lost their job.

India is the world’s largest cutting and polishing diamonds factories of rough diamonds, processing around 94% of the diamonds in the world. Apart from Surat, there are several cities of Gujarat have diamonds cutting and polishing factories.

Seven lakh workers are employed in more than 3000 factories in Surat alone, the south Gujarat city.

Former chief of Surat Diamond Association and currently chairman of Gems and Jewellery Export Promotion Council (Gujarat region), Dinesh Navadia said: “ Yes, workers are being laid off due to multiple factors as the economic slowdown has severely hit the business.”

Babu Gujarati, president of Surat Diamond Association stated “We can’t deny about the lay-off incidents. But we are trying to convince the unit owners to retain their staff and distribute work among them to at least provide some work to everyone. We can’t help if the unit owners fail to strike a balance.”

Mr Navadia and another representatives meeting with Nirmala Sitharaman

Mr Navadia and other representatives met Nirmala Sitharaman, Union Finance Minister on Wednesday. They discuss on some important issues like GST accumulation, lowering taxes and lending by banks.

The trade war between two major countries US and China affected the overseas demand of diamonds. Trade war became the main reason of the unabated price of rough diamonds and unabated price of polished diamonds.

Due to weak demand, polished diamonds rates are dropped by 6-10% in the past four weeks. On the other hand, without responding to the price trends of polished diamonds, the top five diamond mining companies have been lifting up the prices.

Mr Navadia added, trade war of China-US and Yuan devaluation pushed forward the crisis in recent weeks. Gold import custom duty hike, a government measure has proved costly for the diamond industry.

GAJEPC figures show that in July, exports of cut and polished diamonds fell 18.15%, for the first four-month of Fiscal, 2020. Overall, jewellery and gem exports dropped 6.67% from April to July period.