Diamantaires say the past two years have been tough with constant drop in prices and the stock losing value with each passing day.What didn’t help was the rise in gold prices, the slump in US economy and other other western nations, and a sudden change in Chinese buying pattern.
“From 38,000 workers employed in Surat to small/medium businesses and large enterprises, everyone has been hit,” said Ashok Gajera, CMD, Laxmi Diamonds.
We’re being forced to execute orders at loss, says diamantaire
Diamond stock was seeing devaluation with every passing day, forcing enterprises to execute orders at a loss. Diamond rates have been falling for the past 22 months,” said Ashok Gajera, CMD, Laxmi Diamonds.
In Feb this year, the import of rough diamonds from India shot up and the industry felt revival was in sight. However, its optimism was short-lived. Experts say that there is an oversupply of diamonds in India now.
As for the fall in the prices of natural diamonds, Gajera said smaller and cheaper quality flawed diamonds have lost their mojo and are witnessing tough competition from flawless lab-grown stones. At the higher end, demand from the global market is slow. “China, which used to be a large buyer of flawless mined stones, is suddenly not interested and its purchasing power is merely 10%-15% of what it was,” he added.
According to Indian gems and jewellery sector‘s performance data, the overall gross exports of gems and jewellery during April-May this year amounted to $4,691.6 million (Rs 39,123 crore), a 5.9% decrease from the figure for the period last year. Cut and polished diamonds saw a decline of 15.5% to $2,627 million, and the provisional gross export of polished lab-grown diamonds too fell 15.5% to $204.2 million against $241.6 million for the period in 2023.
Even as the gems and jewellery sector commended the Centre for having reduced import duty from 15% to 6% in Budget 2024, Kanaya Kakad, director of India Bullion and Jewellery Association’s governing board, said traders who hold stocks of gold will suffer losses in the short term – they had purchased at a higher rate but will now have to sell cheap.
Years of govt neglect has taken its toll on the industry. Sabyasachi Ray, executive director of GJEPC, said, “We have been told ours is a sector of rich people. But that isn’t so. There is a front-end and there is a back-end. The back-end comprises millions of karigars (craftsmen) and blue-collar workers. The gems and jewellery industry employs 5 million people, many of whom hail from marginal sections. These karigars are there everywhere – Mumbai, Satara, Sangli, Kolhapur, Gujarat. Imagine the scale of employment nationwide if 50,000 people work in Bharat Diamond Bourse in BKC and one lakh in SEEPZ. It is such a labour-intensive sector that anything the govt does will impact five million workers.”