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Following Russia Sanctions, There Is A Chance Of A Recession In Surat

Nearly 5,000 employees are thought to have been let off from Surat's diamond cutting and polishing businesses since November.

Surat is home to the majority of India’s diamond trade with more than 800,000 people employed in more than 4,000 factories dedicated to cutting and polishing. According to the Surat Diamond Association these factories are currently working at approximately 70 per cent capacity due to weakened demand.

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More than 20,000 people in India’s cutting and polishing business have lost employment due to the falling demand for diamonds. Most of India’s diamond commerce is concentrated in Surat, where more than 800,000 people work in more than 4,000 cutting and polishing enterprises.

The Surat Diamond Association reports that these factories are currently operating at roughly 70% capacity due to weak demand, which has resulted in a significant loss of employment possibilities for the local populace. According to Diamond Workers Union vice president Bhavesh Tank, “fear is looming large in the diamond metropolis of Surat whether the recession of 2008 will be replicated this year as well.”

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Recession In Surat

“The workload is reduced because there are fewer orders. As a result, the units are cutting back on staff. In addition, to avoid paying employees on days when they are not working, some units are reducing the number of workdays.”

In a year-over-year comparison, the export of cut and polished diamonds decreased by more than 5% between April and November, according to research by the Gem and Jewellery Export Promotion Council (GJEPC).

Vipul Shah, chairman of the GJEPC, reiterated Tank’s worries.

“We are out there for some rough days,” he told The Economic Times, “with the pandemic in China making a comeback, and there are no signs of respite from the battle between Russia and Ukraine.”

“This fiscal year’s last quarter is of utmost importance as it requires substantial growth to meet this year’s aim of $US45.7 billion.”

The Surat Diamond Market (SDB) has persevered with plans to finish erecting a nine-building complex that officials have referred to as the largest diamond bourse in the world despite the economic unpredictability.

The complex is scheduled to hold its grand opening in August, with notable guests like Prime Minister Shri Narendrabhai Modi likely to be there.

SDB Chairman Vallabhbhai Patel told Rough & Polished that the centre will redefine the diamond sector in India. The centre will include more than 4,500 offices devoted to the diamond, gemstone, and jewellery trade.

In the coming days, “The Surat Diamond Bourse will become the voice of the industry,” he said.

“By offering the best infrastructure, cutting-edge facilities needed for diamond trade, and cutting-edge security systems, we are looking at an extensive picture for expanding the entire diamond and gems and jewellery business.”

Because of the growing commercialization and professionalism of the diamond business, the bulk of diamond traders, makers, and sellers would relocate from Mumbai to Surat once SDB has been inaugurated.

More than 90% of the diamonds in the world are thought to be cut and polished in India.

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With more than 5,000 diamond manufacturing facilities, including some of the most cutting-edge, expansive plants in the world, Surat is also renowned as the largest diamond manufacturing hub in the world. Moreover, with more than 100 publicly traded enterprises, the Surat SEZ is quickly becoming a major centre for the manufacture of jewellery.

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