<div>The diamond industry of Surat, one of the major sources of foreign revenue and livelihood for millions, has hit a rough patch. A number of polishing units are in the grip of recession, with the fear of closure looming large for some.</div><div> </div><div>A slowdown in overseas demand and stagnant rates of polished diamonds as against the growing cost of rough stones are why.</div><div> </div><div>"The overseas demand is very low and there is no increase in the prices of polished diamonds if you compare them with (the increased rates of) rough diamonds since 2014," Surat Diamond Association president Dinesh Navadia told PTI.</div><div> </div><div>Navadia termed the downturn as "unprecedented".</div><div> </div><div>"This happens quite a time, but after three or four months, the situation usually improves. This time, the crisis has lasted for a long time," he said, adding that rumours are only worsening the situation.</div><div> </div><div>While Godhani Gems, a diamond unit with 1,500 workers, has shut shop, some 25 units have gone bankrupt, he said.</div><div> </div><div>On the plight of diamond workers, Navadia said it's difficult for unskilled or semi-skilled workers to find jobs in a slowdown.</div><div> </div><div>Aniruddh Lidbide couldn't agree more.</div><div> </div><div>"There is very less demand (of polished diamonds) from China, South-East Asia, the Gulf, Europe and the US. Because of that, a lot of inventories are still lying with diamond industries," said Lidbide.</div><div> </div><div>"Prices of roughs (rough stones), which are the raw material for the cut and polished diamonds, have gone up to 65-70 per cent in three years. Corresponding to that, the polished diamonds prices have not gone up. It's stagnant so that the profit margin has become very thin," said Lidbide.</div><div> </div><div><strong>Money Diverted To Other Businesses</strong></div><div>Besides, some of the diamond industry owners have diverted money to other businesses, which has also hurt, he said.</div><div> </div><div>"In the last few years, most of the diamond industries have diverted their finances to different business. They have invested mainly in property business and also in the stock market or in crude oil and forex trading," Lidbide said.</div><div> </div><div>He also pointed to the difficulty in getting credit from banks.</div><div> </div><div>"A lot of firms defaulted after 2008 and a major one among them was Vincent Diamond. In 2013, it defaulted to the tune of Rs 4,500 crore and has left the country. That gave a very strong shock to many banks. Some 12-13 banks had provided finance to Vincent Diamond," Lidbide said, adding that default by many others has forced a write-off of around Rs 8,000-10,000 crore in the past 3-4 years.</div><div> </div><div>"More than that, the main financier bank, the Antwerp Diamond Bank in Belgium closed its business on June 13. That is also a big jolt to the diamond industry as it was a key source of finance," he said.</div><div> </div><div><strong>Synthetic Diamonds</strong></div><div>Lidbide said synthetic diamonds which look very similar to the original ones, mainly produced by Russia and China, have also impacted the business.</div><div> </div><div>Many diamond units, he added, have curtailed their operations due to the ongoing crisis.</div><div> </div><div>"Those who were working with 100 per cent capacity have now reduced their operations to 50-60 per cent, depending on their operation and inventories they have," he said.</div><div> </div><div>President of the Gem and Jewelleries Export Promotion Council (GJEPC) Chandrakant Sanghvi was also the same page.</div><div> </div><div>"The international demand for the polished diamond has gone down, which has created the situation of slowdown. This may continue for 3-4 months," he said.</div><div> </div><div>"We have faced such a slowdown many times, but we have emerged out of it," he added.</div><div> </div><div>Pravin Nanavati, owner of the Surat-based She Jewellers, blames reduced exports for the current state of affairs.</div><div> </div><div>"About 90 per cent of the diamond business is based on exports. But as the demand from foreign countries came down in the past couple of months, our industry has been facing the slowdown," Nanavati said.</div><div> </div><div>He also thinks synthetic diamonds are also making people doubt adulteration when they buy precious gems.</div><div> </div><div>"The government should establish a unique university for the diamond industry offering courses of skill development and management," he suggested.</div><div> </div><div>Since lakhs of people are dependent on the industry, Nanavati said, "This is high time the government took steps in the interest of one of the highest revenue-generating industries".</div><div> </div><div>(PTI)</div>
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