Diwali looks bleak for Surat diamantaire’s employees

The ongoing slowdown in diamond industry has led to a muted Diwali forecast for Surat billionaire diamantaire Savjibhai Dholakia, best known for showering gifts of flats, cars, and jewellery on his employees during Diwali. The slowdown, worse than 2008, is here. Forget pricey gifts, we’ll prefer to ensure ‘rozi roti’ (livelihood) for our 6,000 workers this Diwali. This time we have a bigger responsibility to survive. Can’t afford extra spend,” Dholakia, Chairman of Hari Krishna Exports, underlining the stress in the once-shining diamond industry of the city.

The industry has seen at least 15,000 lay-offs in the past few weeks, while more than one lakh have lost jobs since December with the business becoming financially unviable. “We haven’t laid off anyone and don’t intend to,” he added.

The weakness in the market is attributed to unabated rise in the price of rough diamonds, even as prices of polished stones have stopped moving up because of the dip in overseas demand. Market players have charged the top five global diamond miners with jacking up prices ignoring the stagnation in the prices of polished diamonds. “In a normal year, we see a cyclical trough of about four months when the business remains dull. But, this time, the entire last year was bad and a revival is not in sight even till Diwali,” Dholakia said. Adding that he has never seen such a one-sided price trend in rough diamonds in his 35 years in the business.

On prevailing challenges for the industry, Babubhai Gujarati, President, Surat Diamond Association (SDA), said that government measures such as hiking the Customs duty on gold imports have had an adverse impact. Also, over 90 per cent of the business happens overseas and that market has also slumped on lack of demand. “We can’t deny the lay-offs. But we are trying to convince unit owners to retain staff and provide some work to everyone. We can’t help if the unit owners fail to strike a balance,” he said.

  Courtesy: The Hindu Business Line