Surat’s diamond factories lose sparkle as global recession hits sector

Surat's diamond industry faces recession, job losses, and financial distress, leading to suicides and calls for government support.

Mass scale job losses, pay reduction and uncertainty about work have taken the sheen away from Surat’s famed diamond industry, which employs around seven lakh workers in thousands of factories in cutting and polishing rough diamonds and exporting them in multiple countries. 

Geopolitical factors and slacking global demand for diamonds have led to a severe recession in Surat, the largest hub for cutting and polishing rough diamonds. 

Recently, one of the largest diamond firms in Surat declared a 10-day ‘vacation’ for its 50,000 employees from August 17 to 27 citing diminished demand for polished diamonds in international markets due to economic recession in developed countries. 

“We have announced a 10-day vacation for our 50,000 employees. Though we will deduct some amount, all employees will be paid a salary for this period. We are forced to announce this vacation because of the recession. I am tired of this recession now,” Kiran Gems owner Vallabhbhai Lakhani told media persons in Surat. 

According to him, the short supply of rough diamonds and the lack of sufficient demand for polished diamonds exported from Surat are the twin factors that have upended Surat’s factories, which are essentially doing job works. 

Since 95% of polished diamonds are exported, global factors always affect the sale of the precious stones, said experts from Surat, blaming the Russia-Ukraine and Israel-Palestine conflicts as some of the factors responsible for causing this situation. 

According to Surat Diamond Association’s president Jagdish Khunt; the Russia-Ukraine war and Israel’s action in Gaza are some of the factors which have affected the demand for diamonds and overall jewellery sector globally.