Context
Diamond sectors in India is facing mass scale job losses, pay reduction and uncertainty about work, which employs around seven lakh workers in thousands of factories in cutting and polishing rough diamonds and exporting them in multiple countries.
About
- Diamonds are valuable gems, shaped deep inside the Earth’s crust over tens of millions of years, maintaining both cultural and economic importance.
- India’s diamond occurrences date back to prehistoric instances, and the country is home to several diamond-bearing areas.
- South Indian Tract (Andhra Pradesh): This region comprises parts of Anantapur, Kadapa, Guntur, Krishna, Mahabubnagar, and Kurnool districts. Andhra Pradesh hosts significant diamond reserves and extraction activities.
- Central Indian Tract (Madhya Pradesh – Panna Belt): Madhya Pradesh, particularly the Panna belt, is renowned for its diamond deposits.
- Panna has a long record of diamond mining and continues to contribute to India’s gem company.
- Gujarat: The diamond sector in Gujarat shines brightly.
- Surat, also known as the ‘Diamond City’ procedures round eight lakh (800,000) rough diamonds, making it a global hub for diamond sprucing. Recently, the Surat Diamond Bourse has further boosted the company.
- With an anticipated annual turnover of ₹2 lakh crore (about $27 billion), this bourse is ready to offer employment to more than 1.5 lakh people.
India’s Dominance in Cut and Polished Diamonds
- Exports: Indian exports of completed diamonds amount to a dazzling $23 billion annually.
- Employment: The diamond region at once employs around 1 million human beings in India.
- Additionally, it indirectly supports approximately 5 million jobs across various related industries.
- Global Leadership: India techniques over 90% of the diamonds utilized in jewelry global. Indian artisans skillfully transform tough stones into fantastic gems that beautify hands, necks, and ears throughout the world.
Key Concerns
- Lowering Exports: India’s reduce and polished diamond exports in 2023-24 plunged 27.5% from a year ago to a $15.97 billion due to low demand from USA, China and the United Arab Emirates.
- The fall in exports forced the arena’s largest diamond polisher to reduce imports of hard diamonds by 18% from a year ago to $14.27 billion within the economic year 2023-24.
- Mass Job Losses and Pay Reductions: about 7 lakh employees find employment in Surat’s diamond factories, but uncertainty now looms large.
- Global Factors at Play: Since 95% of polished diamonds from Surat are exported, global factors drastically impact the industry.
- Geopolitical tensions, including the Russia-Ukraine struggle and Israel-Palestine troubles, have disrupted demand for diamonds worldwide. These conflicts ripple through the supply chain, affecting Surat’s factories.
- Inventory Woes and Supply Chain Disruptions: Surat’s factories are left with considerable inventories. It is due to the fact Russia, a main provider of rough diamonds, has faced sanctions and geopolitical challenges.
- The sensitive stability between supply and demand has been upset.
- Recession’s Toll: In 2022, Surat’s diamond company boasted a turnover of nearly ₹2,25,000 crore. Alas, that figure has diminished to round ₹1,50,000 crore these days.
- The recession has been relentless, casting a shadow over the city that after sparkled with diamond brilliance.
Other Factors
- Market Dynamics: Fluctuations in international demand and difficult diamond costs affect sales.
- Technological Shifts: The upward push of lab-grown diamonds and changing customer possibilities necessitate edition.
- Sustainability: Balancing growth with environmental and ethical considerations remains important.
Source: The Indian Express