AHMEDABAD: While diamonds are often regarded as timeless treasures, the industries that create these precious gems are currently facing significant challenges. A severe recession has impacted the diamond industry in Gujarat, leading to the closure of more than 2,000 factories -- approximately 50 % of the total-- after the Diwali vacation, according to the Gujarat Diamond Workers Association.
This year, the crisis has driven 45 gem artisans to take their own lives amid rising unemployment. The government has acknowledged in the Rajya Sabha that the diamond sector has struggled for the past three years due to declining demand in key export markets and supply chain disruptions, including G7 sanctions on diamonds of Russian origin.
“In Surat, the diamond hub of Gujarat, 40% of factories remain shut after Diwali,” said Ramesh Jilaria, President of the Gujarat Diamond Association. “Ahmedabad sees 30% closures, while cities like Rajkot, Amreli and Botad report shutdowns of 50% to 60%.”
“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 returned to work. Wages for jewelers have plummeted by as much as 50%, and we estimate that around 200,000 workers could face job losses in the coming days. In just one year, more than 45 diamond workers have died by suicide due to financial difficulties (from January 2024 to December 2024),” Jilaria warned.
The government’s statement in the Rajya Sabha corroborates Jilaria’s claim about the challenges facing the diamond industry. On December 6, 2024, the Ministry of Commerce & Industry acknowledged in the Upper House, “The diamond sector has been facing challenges over the last three years due to reduced demand in major export markets and supply-side issues such as G7 sanctions on Russian-origin diamonds.”
The statement also emphasized a decline in diamond import-export figures. It indicated a downward trend over three consecutive financial years. Exports fell significantly from $25.48 billion in 2021-22 to $18.37 billion in 2023-24, a decline of nearly 28%. Imports also decreased, shrinking from $28.87 billion in 2021-22 to $22.99 billion in 2023-24, reflecting a 20% drop. Consequently, the total trade volume declined from $54.35 billion in 2021-22 to $41.37 billion in 2023-24, a reduction of approximately 24%.
According to the National Council of Applied Economic Research (NCAER) Gems & Jewellery Study from October 2020, there are around 18,036 companies employing 819,926 individuals in the diamond industry. “The global recession has hit Gujarat’s diamond industry hard,” stated Bhavesh Tank, an official with the Gujarat Diamond Association.