In a significant move reflecting the current market downturn, approximately 200 diamond-cutting and polishing factories in Surat will halt operations for ten days beginning August 18.
This decision comes as the industry struggles with sluggish exports to key markets like China and the United States.
As per a report in The Economic Times, the temporary shutdown aims to reduce inventory levels in response to weakening demand. China, a major consumer, has shifted its focus to gold purchases in the post-COVID-19 era, while the US market has seen a decline in natural diamond demand.
According to the report, the slowdown’s impact extends beyond the larger factories. Reports indicate that around 500 smaller cutting and polishing units across Gujarat have permanently ceased operations.
According to labour union sources, these closures have resulted in job losses for an estimated 70,000 to 75,000 workers.
These smaller units previously played a crucial role in the supply chain, providing diamonds to larger exporters in Surat and Mumbai for distribution to global markets.
Their closure highlights the ripple effects of the current market conditions on the entire diamond industry ecosystem in the region.
The report added that the situation underscores the challenges facing India’s diamond sector, which has long been a significant contributor to the country’s export economy.
