Surat Diamond Sector Shows Signs of RecoveryApril 18, 16
(IDEX Online News) – The Surat diamond sector, which has been suffering reduced demand due to economic slowdown, has begun to show signs of recovery, according to a report in The Business Standard.
Trade had begun to pick up in January-February; however, the recent 42-day Indian jewelers strike deflated domestic diamond demand, which accounts for around 15 percent of Surat’s business.
The Business Standard article reported that one diamond unit owner said that the recent downturn was more severe than the one in 2008, because recovery was quicker after those financial difficulties.
Surat Diamond Association president Dinesh Navadia said that many of the up-to 300 units that were shuttered during the slump have now reopened. Navadia claimed that there was now a labor shortage of 20 percent to 25 percent. At its peak, Surat employed 600,000 people in more than 5,000 units. However, this number of employees had shrunk to approximately 350,000 people by the end of 2015 – many on reduced wages.
Navadia said that demand from China and the US had picked up, requiring the sourcing of skilled workers to cope with that increase in trade.
The inventory situation is also thought to have been corrected, with units holding around a month’s inventory, as opposed to six months in September-October.