The Hindu Business Line : Diamond biz in Surat goes on a longer holiday

The diamond business, which was estimated to have fetched revenues and foreign exchange worth about Rs 75,000 crore annually only a couple of years ago, no longer glitters.

The sub-prime tremors in the US have their impact felt in Surat, the industry’s hub, and the order book has shrunk steadily.

Although no official figures are available, diamond polishing and cutting industry sources say that it has suffered at least 30 per cent erosion, affecting wages of workers and profits of unit owners. Orders for Deepavali and Christmas this time are not what they used to be.

Hardly had Surat, where about three lakh people from across the country are engaged in diamond cutting and polishing business, overcome the workers’ July strike when the ongoing economic downturn struck a further blow. Global meltdown has hit hard diamond business that was already reeling under a recessionary trend for quite some time now.

According to industry sources, at least 25 per cent of the diamond cutting and polishing units have declared a long Deepavali holiday – for at least 45 days, unlike 15-20 days in the past. Workers say that the present crisis has taken away whatever wage hike they got. Owners of most units believe that the workers – many of them from the Hindi-speaking States – are unlikely to return before December-end.

According to Surat Diamond Association sources, the normal vacation has been extended as there is hardly any fresh demand for polished diamonds. “The usual orders for the Christmas season have not come this year due to the global economic crisis.”

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