india

Updated: Sep 30, 2019 11:18 IST

The 2019 slowdown in the Surat diamond industry has driven workers and businessmen to alternative and innovative means of survival and long-term growth, resulting in less stress on people than in 2008 downturn, say industry leaders.

Two clear trends are visible. First, that workers are returning to villages which have received plenty rain and second, around 50% of new diamond manufacturing units in Surat have come up in the last one year, since the slowdown started.

Surat’s Rs 1 lakh crore diamond industry suffered a major blow because of substantial fall in the demand of the polished diamonds from China because of its trade war with United States. Around 42% per cent of the diamonds polished in the city are exported to China, which then get routed to the US in form of manufactured jewellery.

Diamond industry leaders say that although the current crisis is worse than the 2008 recession – with over a lakh of the seven lakh-strong workforce losing jobs and 30% of the total 40,000 small and big units downing the shutters this time – the impact on people has been much less.

In 2008-09, about 70 diamond polishers had reportedly committed suicide. This time, only two suicide cases have been confirmed by the police.

“The shock from the meltdown has been absorbed well. Luckily, the monsoon this year has been remarkable. Reverse migration – from Surat to villages – is being witnessed. Polishers are heading back to rural Saurashtra to toil in farms,” said Dinesh Navadiya, president Gems and Jewellery Promotion Council, adding that the reverse migration would be temporary and workers will return when the demand improves.

On reverse migration, Govind Patel (30), a polisher settled in worker’s hub Vrachha area, who is packing his bag and going back to native place in Saurashtra’s Amreli district, said: “I used to make around Rs 20,000 per month and which was enough to support a family of three. For past two months I am jobless. But, monsoon has been good and my family has 10 bigha of farmland. I will work there, as we expected good crop next year.”

Saurashtra, the western peninsula that is hub of crash crops like groundnut and cotton, has seen 112% per cent of rainfall, highest in a century.

While some workers have returned to villages, many have been absorbed in the new manufacturing units that have come up in the past one year.

Jayantibhai Sarvaiya, president of Surat Jewellery Manufacturers Association (SJMA), said: “Over the last three years, nearly 500 small and medium diamond jewellery manufacturing units have been set up in Surat. More than half of them have come up in the past one year or so when the polishing business went down.”

The manufacturing units are evolving into a new economic branch to the city as they are touted to become the third pillar of Surat’s economy, joining diamond and textile industries.

Most of these manufacturing units, including 80 registered with the SJMA, have a workforce of more than 200 each and get orders from top Indian jewellery brands. These units provide only the designing work. The brands provide their own diamonds and gold.

“This sector is set to grow many fold when the Surat Diamond Bourse, touted to be the world’s largest, starts operations probably by 2020,” said Sarvaiya.

At present, direct exports and imports of both diamonds and jewellery is possible only through the Bombay Diamond Bourse. Once the Surat bourse is operational, the manufacturing units will be able to deal directly with the US clients, he said.

Local traders believe that Surat has everything that can compete with China in jewellery, including affordable and skilled labour and connectivity with the world. “Surat has an upper edge in form of polishing units, which China does not have. With polishing, if we have jewellery manufacturing the city is set to emerge has import-export hub,” Savaliya said.