According to the Economic Times, some 2,000 workers have lost their employment in Surat as a result of a drop in demand for cut and polished diamonds in the West and China during the last month. Moneycontrol was unable to independently confirm the report.
Surat polishes over 80% of the diamonds sold worldwide. Around 8 lakh people are employed in the industry’s 4,000 cutting and polishing operations. According to Damji Mavani, secretary of the Surat Diamond Association (SDA), the reduction in demand has pushed most plants to operate at only 60 to 70 percent capacity, implying a need for fewer staff.
According to Bhavesh Tank, vice-president of the Diamond Workers Union in Gujarat, the diamond metropolis of Surat is fearful of a repeat of the 2008-style crisis. “Because there are fewer orders, the workload is reduced. As a result, the units are cutting their staff. Some units are shortening work days in order to avoid paying employees on days when they are not working.”
The United States is the largest market for cut and polished diamonds, with China coming in second. Between April and November 2022, India’s diamond exports fell 5.43 percent from the previous year.
As a result of the reduction in demand, polished diamond prices have softened, affecting diamantaires’ profits and pushing them to reduce labour, while raw diamond prices have stayed strong.
“With the epidemic in China making a comeback and no indications of relief from the war between Russia and Ukraine, with inflation increasing in various areas of the world, we are in for some difficult days,” said Vipul Shah, head of the GJEPC. “The last quarter of this fiscal year is critical because it requires robust growth to meet this year’s objective of $45.7 billion.”
Surat, sometimes known as the “Diamond City of the World,” is a centre for diamond cutting and polishing. It is known as “Diamond City” because it polishes 90 percent of the world’s diamonds. It is also well-known for its silk and cotton factories.
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