Surat's diamond industry downs shutters for Diwali

It is vacation time for the diamond industry, as diamond cutting and polishing units and the trading markets in Surat down shutters for the annual Diwali vacation on Thursday, on the
occasion of Dhanteras.

As against the traditional Diwali vacation of four to five weeks, diamond units will remain closed for only two weeks this year, in the wake of stable demand for polished diamonds from various markets ahead of the Christmas season.

There are approximately 4,000 diamond cutting & polishing units in Surat, which include large factories, medium and small units. These units employ an estimated 4 lakh workers, majority of who hail from Saurashtra. Most of these workers and their family members will travel to their native places to celebrate the festivals.

“There is growing confidence of improvement in diamond jewellery sales during Christmas season. Diamond manufacturers want to make the most of the opportunity, which is why the vacation is much shorter this year," Rohit Mehta, president of Surat Diamond Association (SDA), said.

Another reason for shorter vacation is that production levels in diamond industry have been constrained in the recent months due to acute shortage of workers. The unit owners are hoping that they will be able to meet the orders by restarting early.

Leading manufacturers like Sanghavi Exports, Dharmanandan Diamonds, Kiran Exports, Laxmi Diamonds, Shree Ramkrishna Exports, and others have announced a shorter vacation of two weeks. Majority of the medium and smaller diamond units will also reopen by the end of October or beginning of November.

Diamond manufacturers and exporters said that restarting early after Diwali will leave just enough time for them to cater to the pre-Christmas orders from retailers.

"The small window can be used to complete the last-minute orders. The orders are stable at present, but who knows, demand may suddenly pick up in the run-up to Christmas. We don't want to rue the missed opportunity by having a longer vacation," a partner in a DTC sightholder firm, said, requesting anonymity.

While most of the diamond cutting units will remain closed for two weeks, some units are planning to restart operations within a week or ten days. Some units have decided to reopen from October 22, and are offering attractive 15 - 20% bonus in the form of extra wages to lure polishers. Facing shortage of workers, many companies are also offering additional incentives to their workers for bringing other polishers.

Besides the cutting & polishing units, the diamond trading hubs of Mahidharpura Hira Bazaar and Varachha Mini Bazaar, will also observe a smaller vacation of two weeks this year.

“The trade levels are good right now. When diamond units are having a smaller vacation in anticipation of good demand, it makes sense for us to also reopen early," Kiran Shah, a diamond trader in Mahidharpura Hira Bazaar, said.