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Home» Economy» SMEs» Pricey dollar dulls diamond sheen

Pricey dollar dulls diamond sheen

GGN Team | August 07, 2012, 01:05 PM IST
pricey dollar dulls diamond sheen

Surat : The diamond polishing industry of Surat once again faces a slump. After the worldwide recession in 2008, the expensive dollar has now pushed the diamond industry into a slowdown. Along with a depreciating rupee, credit crunch and insufficient export finance have added to the woes of the local diamond traders. To make matters worse, demand of polished diamonds, in domestic as well as international markets, is on a downward slope.

This slowdown in world's biggest diamond cutting and polishing centre in Surat has upset employment and industry in Saurashtra as well, where nearly 4,500 small units employ nearly 4 lakh workers. Many in the polishing industry have reduced production hours in their units, while some have stopped production altogether. Industry people claim that nearly 30,000 diamond workers in the region have been rendered jobless in the last three months. 

Surat’s diamond industry is known for creating polished diamonds out of imported uncut or rough diamonds. Rough diamonds are imported and after cutting and polishing work, the finished pieces are sold in local and global markets. The annual rough diamond demand is pegged at $11 billion. India is by far the largest diamond cutting centre and largest customer of rough diamonds, accounting for 72 per cent of the worldwide consumption.

But the depreciating rupee, which has touched an all-time low in recent times, has intimidated diamond traders to cut down on their rough imports by nearly 30 percent. Along with this, a retreating demand for polished diamonds in the global markets, even after the Gems & Jewellery shows held recently in Las Vegas and Hong Kong, has alarmed traders. This lack of enthusiasm has made the industry wary, particularly those who procured rough diamonds at a premium price.

Those in the trade believe this to be a short-term situation, but they agree that the diamond industry stands a better chance if the value of Rupee improves against Dollar. 

After disappointment at Las Vegas and Hong Kong shows, traders have their eyes on India Internationl Jewellery Show to be held in August in Mumbai. Christmas is main season for the industry and the IIJS show will indicate the volume of business the industry is likely to get this December. Till then, traders are in a wait-and-watch mode, praying for big orders from Europe and US before Christmas.


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