AHMEDABAD: Gujarat's diamond industry is reeling under a severe recession, with over 50% of factories shutting down after the Diwali vacation, claims the Gujarat Diamond Workers Association. The crisis has claimed the lives of 45 gem artists and forced 2000 factories out of business. The diamond industry had been on the decline over the past two years due to a falling demand in key export markets and supply chain disruptions, including G7 sanctions on Russian-origin diamonds.
"In Surat, the diamond hub of Gujarat, 40% of factories remain shut post-Diwali," said Gujarat Diamond Association President Ramesh Jilaria.
"Ahmedabad sees 30% closures, while cities like Rajkot, Amreli, Bhavnagar, and Botad report 50% to 60% shutdowns. An estimated 2,000 diamond factories across these regions have not reopened after Diwali, and many may remain closed," he added. "Even in operational units, only 50% to 60% of gem artisans have resumed work."
"Wages for jewellers have plummeted by up to 50%, and we estimate around 2 lakh workers could lose their jobs in the coming days. In just one year more than 45 diamond workers had committed suicide due to financial problem (from January 2024 to December 2024)" Jilaria said.
The Indian government's statement in the Rajya Sabha lends indirect support to Ramesh Jilaria's claim about the challenges plaguing the diamond industry.
The Ministry of Commerce & Industry stated on December 6, 2024, in response to a Rajya Sabha query by MP Neeraj Dangi "Yes, the diamond sector has been facing challenges during the last three years due to reduced demand in major export destinations and supply side issues such as G7 Sanctions on Russian origin diamonds."
The Ministry's response in the Rajya Sabha also highlights a decline in diamond import-export figures.
The Rajya Sabha Data Indicate, The trade figures reveal a declining trend over three consecutive financial years. Exports dropped significantly from $25.48 billion in 2021-22 to $18.37 billion in 2023-24, marking a stark decrease of nearly 28%. Imports also followed a downward trend, shrinking from $28.87 billion in 2021-22 to $22.99 billion in 2023-24, reflecting a 20% dip.
As a result, total trade volume slid from $54.35 billion in 2021-22 to $41.37 billion in 2023-24, a reduction of around 24%.
As per the National Council of Applied Economic Research (NCAER) Gems & Jewellery Study of October 2020, there are about 18,036 companies with 8,19,926 employees in the diamond industry.
"The global recession has hit Gujarat's diamond industry hard," said Bhavesh Tank, an official of the Gujarat Diamond Association. "Factories that once operated for 12 hours now run only six, and workers who earned ₹25,000 to ₹30,000 monthly are now making just ₹8,000 to ₹12,000."
He added grimly, "This downturn is unprecedented—such a severe recession hasn’t been witnessed in the diamond industry in the last 50 years. Many families are struggling to make ends meet."
