The diamond trade in Gujarat is facing significant problems due to ongoing global conflicts. The wars between Russia and Ukraine and between Israel and Hamas have caused geopolitical tensions, reducing the demand for diamonds polished in Gujarat. This drop in demand has put the diamond industry in a tough spot.
Impact on Workers
In Surat, many diamond factories are giving workers 2 to 3 days off each week due to a lack of work. Some workers are even looking for jobs in other fields. The situation has become so severe that many companies have had to lay off workers. Surat alone provides jobs to 600,000 diamond workers, while the rest of Gujarat employs 300,000 workers.
Factory Shutdowns
Several diamond units in Surat, including the major producer Kiran Gems and Diamonds, have decided to shut down operations from August 17 to August 28. Kiran Gems employs over 50,000 people, most of whom work in Surat. Many companies are choosing to give long vacations to their workers, reduce working hours, or cut down the number of working days. The problems are due to rising unsold inventory, falling prices, and the impact of the Russia-Ukraine war.
Challenges for the Industry
Factories are struggling with a 29% drop in rough diamond imports from Russia due to the ongoing conflict. This decrease is further affecting Surat’s diamond workers. The total export of polished diamonds from India, which is mostly sent to the USA, UAE, and Hong Kong, has also fallen.
Economic Slowdown
The Indian gem and jewelry industry is in a downturn. According to the Gem and Jewelry Export Promotion Council (GJEPC), the total export for the fiscal year 2024 was $32.02 billion, a 15% decrease from the previous year. The gross imports also fell by 14% to $22.27 billion, reaching the lowest level in three years.
Business owners are asking the Gujarat government for financial aid to help diamond workers who have lost their jobs or are facing difficulties due to the economic slowdown.
