India is the world's largest cutting and polishing centre of rough diamonds, is facing employment crisis. Due to slowdown in demand for diamonds in China and West Asia, the diamond industries in Gujarat have seen 10-50 percent job loss.
Prices of polished diamonds have dropped 6-10 percent in the past four months due to weak demand and the industry does not foresee the demand to pick up soon.
Job loss to the tune of 10-15 percent has already happened in the diamond hub of Gujarat which is spread over Surat and smaller centres like Amreli and Bhavnagar,” shares Colin Shah, the Vice-Chairman of the Gem & Jewellery Export Promotion Council.
He further shared in media that “A slowdown in global demand, coupled with liquidity crisis, has affected the trade. Though demand in the US and Europe is steady, demand has dropped by 15-20 percent in China which is a major market. Demand in the Gulf countries is also not encouraging.”
According to reports, The US-China trade war has taken the sheen out of the Indian diamond trade. Exports of cut-and-polished diamond dropped 18.15 percent in July and 15.11 percent for the first four months of fiscal 2020, compared with a year earlier. Overall, gem and jewellery exports fell 6.67% during April-July.
The diamond trade in Gujarat employs around 20 lakh people, said Babu Gujarati, a former president of the Surat Diamond Association. Of these, around 8 lakh people are engaged in cutting and polishing of rough diamonds.
Gujarati said the slowdown had affected the trade from the beginning of the current fiscal year. “Diamond traders have cut down shifts to tide over the situation. There has been job loss too. But gradually, the trade is coming in terms with the present situation.”