Diamond Industry worldwide is going through a very grim and recessionary phase, but the effects of this is most prominent on the Indian Diamond Processing (Cutting & Polishing) sector. More then 2,000 diamond processing units have shut shops including some of the big ones like Godhani Gems that used to employ 1,500 workers. Besides, more than 25 units have gone bankrupt and others who used to operate on 100% capacity are now left with only 50-60% capacity utilization.
Surat – India’s Diamond Cutting & Polishing capital, which used to polish 8 out of 10 stones globally, has witnessed 50% dip in diamond production since last 6 months. This has resulted in lay offs of thousands of diamond processing workers. Unskilled and Semi-skilled workers in the sector are worst hit. Unable to find jobs and feed themselves and their families, some of these workers are taking the extreme step of ending their lives.
At least 2 such diamond processing workers have reportedly committed suicide by consuming poison, after being laid off from their jobs. But it’s not just the workers, even owners of smaller diamond polishing units are feeling the heat. Unable to pay back debts since being almost out of business in this gloomy depression and credit crunch, a 37-year old owner of a small diamond polishing unit in Surat, which used to employ 25 people, also took the drastic step and committed suicide.
In Mumbai’s diamond market, more than 20 traders have faced losses between INR 50 – 450 Crores (USD 0.8 – 7 million) since past few months, which have in turn affected smaller players too. India’s diamond industry recorded a 25% decline in exports in the April – June quarter. Global economic conditions and factors like increased rough prices, limited polished stones price rise and diamond demand slump have led to such situation.
Numerous unemployed diamond workers in Surat and other regions are finding it difficult to support their families while literally living hand-to-mouth. With their precision skills and competencies, some of the erstwhile diamond cutting units and workers have now even converted into cardiac stent making, a growing market globally and in India. Such smaller converted cutting units are now giving bigger healthcare players like Abbott a run for their money.
With uncertain markets and industry conditions, no light at the end of the tunnel visible, some diamond workers and owners even ending their lives in the desperate times and others turning towards other industries, is the Indian Diamond Processing sector on verge of collapse?