Around 2,000 people have lost their jobs in Surat on the back of a slump in demand for cut and polished diamonds in the West and China over the past one month, reported the Economic Times.
Moneycontrol could not independently verify the news.
About 80 percent of diamonds sold in the world are polished in Surat. The industry provides employment to about 8 lakh workers in about 4,000 cutting and polishing units. The decline in demand has forced most of the units to work only at 60 to 70 percent capacity, said Damji Mavani, the secretary of Surat Diamond Association (SDA), which also in turn implies that there is a need for fewer workers.
Bhavesh Tank, the vice-president of the Diamond Workers Union in Gujarat, said fear of a return of the 2008-like recession looms large on the diamond city of Surat. "Orders are fewer and so the workload is less. Therefore, the units are reducing the workforce. Some units are cutting down work days so that they do not have to pay the workers on days when they are not working.”
The US is the biggest market for cut and polished diamonds, and China is a close second. India’s diamond exports slowed down 5.43 percent between April and November 2022 over the previous year.
In consequence of the demand drop, the prices of polished diamonds have softened, impacting the margins of the diamantaires and forcing them to cut down on manpower, though of rough diamond prices remained high.
"With the pandemic in China making a comeback and there are no signs of respite from the war between Russia and Ukraine, inflation soaring in some parts of the world, we are out there for some tough times," said Vipul Shah, chairman, GJEPC. "The last quarter of this fiscal year is very crucial as it demands strong growth to achieve this year's target of $45.7 billion."
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