Surat’s diamond exports face steep decline amid sluggish global demand
The overall gross exports of gems & jewellery for the April-June quarter stood at Rs.60,222.10 crore as compared to Rs.77,499.44 crore in the corresponding period in the year previous, suggesting a decline of 28.08%, according to data available on Gem & Jewellery Export Promotion Council’s (GJEPC) website
The Surat Special Economic Zone or SUR SEZ witnessed a decline of 65% at Rs.3,173 crore as compared to the corresponding period last year (Rs.9,064 crore) in its gems and jewellery exports for the first four months of the 2023-23 financial year, officials said.
Of the total exports of Rs.3706.96 crore between April and July this year that includes engineering, pharma, textile, tobacco and other manufacturing units as well, gems and jewellery contributed nearly 85% of the exports, they said.
There are close to 100 units in the Surat SEZ.
“The decline in the exports has been mainly due to the overall decline in the demand for diamonds from US and European countries. In the first three months from April to June, the exports were down by more than 70%,” said Virendra Singh, additional director general of Foreign Trade and Development Commissioner for SUR SEZ.
Singh also cited the closure of four units of Sagar Diamonds that were raided by the Enforcement Directorate (ED) in March this year as one of the reasons behind the decline in exports.
Sagar Diamonds is being investigated for its involvement in an alleged money laundering case linked to a Chinese-controlled money lending app that allegedly deceived many people, said an official aware of the matter.
The overall gross exports of gems & jewellery for the April-June quarter stood at Rs.60,222.10 crore as compared to Rs.77,499.44 crore in the corresponding period in the year previous, suggesting a decline of 28.08%, according to data available on Gem & Jewellery Export Promotion Council’s (GJEPC) website.
The diamond hub employs close to 800,000 people and is a major contributor to India’s gems and jewellery exports of about Rs.3 lakh crore. The recession in the Surat diamond industry was triggered by the Russia-Ukraine war last year, according to experts.
Dinesh Navadiya, a Surat-based diamond baron and former regional chairman of the GJEPC, said the demand for diamonds and jewellery has decreased globally, especially in the US, Hong Kong, and China, in the past year.
He explained that many countries, particularly the US and Europe, are avoiding buying things from Russia. This situation is important because nearly one-third of the rough diamonds used in Surat come from Russia.
He said that the ED raid involving units in Surat SEZ had severely impacted the exports from the special economic zone.
Global challenges impacted diamond demand in India’s key markets like the US and China, while some regions in Europe and South-East Asia performed better, said an industry expert who spoke on condition of anonymity.
India’s own challenges included irregular Russian rough diamond supply and difficulties with local diamond cutting due to preferences for localization in countries like Namibia, Botswana, and Angola, he said.