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Surat facing layoff problems
By agencies
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Thursday, 19 May 2005, 19:30 IST
SURAT: The famed Surat diamond polishing industry, which accounts for eight out of 10 diamonds sold in the world, is facing a peculiar problem. While the industry is soaring in value terms, lower volumes may force diamond-polishing units to lay off workers.
"Although the diamond industry's turnover in Surat has grown significantly last year, the number of stones processed has fallen sharply. This is because of a sudden spurt in prices accompanied by reduced supply," said Pravin Nanavaty, a leading diamond trader and former president of the Surat Diamond Association.
"We fear that it may have an adverse impact on the employment opportunities available to the 700,000 diamond workers in the city."
According to Gems and Jewelry Export Promotion Council (GJEPC) data, rough diamond imports into India fell by 11.5 percent from 199.1 million carats in 2003-04 to 176.2 million carats in 2004-05.
In terms of value, however, rough diamond imports registered a 6.3 percent increase to touch $7.6 billion in 2004-05.
Exports of cut and polished diamonds, according to the GJEPC, rose 30 percent from $8.63 billion in 2003-04 to $11.18 billion in 2004-05.
Almost every third resident of Surat, which has a population of 3.5 million, is connected with the diamond polishing industry, and workers travel from different parts of India to find employment in the city.
One of the alternatives, according to Nanavaty, is to train the workers in jewelry making.
That would help them find employment in the upcoming jewelry park in the city, proposed to be the largest such facility in the world.
"We are working with both the State and Central Governments and among ourselves to address this issue. We have suggested that courses on jewelry making be introduced in polytechnics and other institutions in order to convert the workers from diamond polishers to jewelry makers," he added.
The first few units in the 1 million sqm jewelry park are expected to go on stream in the next two years and will throw up a demand for skilled jewelry artisans.
Diamond traders in Surat say that the supply position is unlikely to ease in the near future, as no significant new discoveries have been made anywhere in the world.
Meanwhile, prices have been rising steadily and diamonds have emerged as the latest investment option.
India itself has emerged as a major diamond consuming market in the last few years.
"That has given a fillip to diamond prices. Once the park becomes operational, we hope to rise up on the value chain and become a jewelry hub on the lines of Antwerp," said Nanavaty.