Diamond business picks up in Gujarat

Fifteen months after it suffered massive job losses because of the global economic downturn, the state’s diamond cutting and polishing industry is shining once more. The number of polishers employed in the industry and its output are once again at pre-recession levels, say industry experts.

“Most of the workers, who had left the industry either on their own or because they were laid off, have come back,” Rohit Mehta, president of Surat Diamond Association, told DNA. “Diamond units in Surat had employed as many as 4.5 lakh workers before recession struck. But, in early 2009, the number of workers in
the industry had declined to half. Now however the industry is back to the pre-recession levels.”

Industry experts said the return of workers had led to the reopening of hundreds of small diamond units in Surat, Ahmedabad, and other places, which had closed in the wake of the economic meltdown.

“The return to earlier levels of employment and output has been possible mainly because demand for diamonds has improved in recent months, and the diamond industry expects good times ahead,” Narsi Patel, president of Vivekanand Diamond Association, Ahmedabad, said. “With workers getting sufficient work, their income has also returned to the earlier levels.”

As of now, the diamond units in Ahmedabad employ around 80,000 polishers, which is slightly lower than the number (one lakh) employed before recession. However, industry experts say that the number of workers is increasing and is likely to return to earlier levels in four to six months.

“Right now, polished diamond output is at about 85-90% of pre-recession levels. We are expecting it to rise further in the coming months,” KK Sharma, executive director, Indian Diamond Institute, said.

The current optimism in the diamond industry is a far cry from the mood at the beginning of 2009 when many diamond units had to close. Almost all the other units had to cut their output because of the fall in demand for diamonds. But with demand reviving and the markets improving, diamond manufacturers are confident that more workers will return to the industry.

Ashit Mehta, managing director of Blue Star Group, one of the largest diamond companies in the world, said many diamond workers who had shifted to the textile industry during the crisis have returned to the gem industry.

“More workers will return to the industry as it is still recovering,” Mehta said.