 "Diamond processors say severe stress from lack of demand; job losses likely")
Around half the workers, skilled and unskilled, in the diamond cutting and polishing sector face the threat of job loss this year, due to a sharp decline in export.
According to an industry estimate, our diamond processing industry presently employs around 700,000 workers directly, down 30 per cent over the past three years due to a sharp decline in gems and jewellery export. Also, alternative job avenues have opened in rural areas and other industries, such as textiles. Hence, a large number of skilled workers have made the shift, for assured income.
"The industry is facing innumerable difficulties. Today, selling of gems and jewellery is taking time because of the global economic downturn, resulting in stockpiling equivalent to four to five months of sales, as against one or two months in normal circumstances. Holding this much inventory is an additional burden, along with high interest cost. Lots of small factories are closed and large ones are working for six hours daily, instead of 10 hours earlier. If this trend continues, we have to retrench a lot of workers," said Praveen Shankar Pandya, chairman, Gems and Jewellery Export Promotion Council.
Overall gems and jewellery export have declined 13 per cent in rupee terms and 18 per cent in dollar terms over the April-October period this year, first seven months of the financial year.
Large processors in Surat, the country's diamond capital, have reduced operations by at least 25 per cent over the past year. Availability of gold has also been a major issue for small goldsmiths.
"Half of all workers might get retrenched if the situation does not improve. The processing industry is passing through a recession," said Vipul Shah, managing director, Asian Star Co, one of India's largest exporters of gems and jewellery.
Import of rough diamonds declined by 25 per cent in April-October at $13,740 million this year as compared to $19,553 mn in the same period last year. About 90 per cent of all rough diamonds came to India for cutting and polishing. And, our gems & jewellery export is nearly 13 per cent of overall merchandise export.
"Workers have been asked to maintain self-discipline in terms of productivity and wages," said Dinesh Navadia, president, Surat Diamond Association.
The industry also complains of a 10 per cent import duty on gold having impacted the manufacturing of jewellery, contending import from countries with a free trade agreement works out cheaper.
According to an industry estimate, our diamond processing industry presently employs around 700,000 workers directly, down 30 per cent over the past three years due to a sharp decline in gems and jewellery export. Also, alternative job avenues have opened in rural areas and other industries, such as textiles. Hence, a large number of skilled workers have made the shift, for assured income.
"The industry is facing innumerable difficulties. Today, selling of gems and jewellery is taking time because of the global economic downturn, resulting in stockpiling equivalent to four to five months of sales, as against one or two months in normal circumstances. Holding this much inventory is an additional burden, along with high interest cost. Lots of small factories are closed and large ones are working for six hours daily, instead of 10 hours earlier. If this trend continues, we have to retrench a lot of workers," said Praveen Shankar Pandya, chairman, Gems and Jewellery Export Promotion Council.
Overall gems and jewellery export have declined 13 per cent in rupee terms and 18 per cent in dollar terms over the April-October period this year, first seven months of the financial year.
Large processors in Surat, the country's diamond capital, have reduced operations by at least 25 per cent over the past year. Availability of gold has also been a major issue for small goldsmiths.
"Half of all workers might get retrenched if the situation does not improve. The processing industry is passing through a recession," said Vipul Shah, managing director, Asian Star Co, one of India's largest exporters of gems and jewellery.
Import of rough diamonds declined by 25 per cent in April-October at $13,740 million this year as compared to $19,553 mn in the same period last year. About 90 per cent of all rough diamonds came to India for cutting and polishing. And, our gems & jewellery export is nearly 13 per cent of overall merchandise export.
"Workers have been asked to maintain self-discipline in terms of productivity and wages," said Dinesh Navadia, president, Surat Diamond Association.
The industry also complains of a 10 per cent import duty on gold having impacted the manufacturing of jewellery, contending import from countries with a free trade agreement works out cheaper.