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Surat's diamond industry recovering

Last updated on: August 11, 2009 

Image: An employee inspects diamonds while grading them at a diamond merchant's workshop.
Photographs: Arko Datta/Reuters

Surat's diamond industry -- which had been severely hit by the global slowdown -- is slowly gaining momentum with demand from domestic, international and emerging markets, like China, rising, industry sources said on Monday.

"Demand for polished diamonds has picked up in last two months," regional chairman of Gujarat, Gems and Jewellery Export Promotion Council, Chandrakant Sanghvi, told PTI.

Surat's diamond industry recovering

Image: Model Gauhar Khan displays hand-crafted diamond jewellery.
Photographs: Punit Paranjpe/Reuters

"The demand has started pouring in from all quarters, but Chinese and domestic markets are emerging to be the major consumers of diamonds post slowdown scenario," Sanghvi said.

Because of recession in the United States and Europe, the diamond industry of Surat, which is mainly export-oriented, had a major downturn since 2008 end, which resulted in closing down of processing units leaving thousands of diamond workers jobless.

Surat's diamond industry recovering

Image: An employee sifts diamonds at a diamond cutting and polishing factory in Surat.
Photographs: Arko Datta/Reuters

According to the state government, 20 diamond workers committed suicide after recession hit diamond industry.

The Reserve Bank of India figrues too show that the diamond industry in Gujarat accounts for 72 per cent of the world's processed diamonds and 80 per cent of India's diamond exports.

Surat's diamond industry recovering

Image: Employees work at a diamond cutting and polishing factory in Surat.
Photographs: Arko Datta/Reuters

The diamond market has improved slightly, but it is difficult to take a call on the post slowdown scenario today, Rohit Mehta, president, Surat Diamond Association, said.

"Since the prices of rough diamonds keep fluctuating, it is difficult to assess the market scenario," Mehta added.

Surat's diamond industry recovering

Image: Family members of unemployed diamond workers raise slogans.
Photographs: Amit Dave/Reuters

"Exports are not very encouraging as off now, but we expect the scenario to turn positive with the revival of economy in Europe," he said.

Big time exporters are now banking on domestic demand for diamonds and from growing markets like China, Mehta said.

Surat's diamond industry recovering

Image: An employee inspects diamonds while grading them.
Photographs: Arko Datta/Reuters

Those who took entry when the prices of rough diamonds dipped nearly by 40 per cent from top value are at an advantageous position now, but some units were compelled to book losses, he said.

Hit by the slowdown, the diamond capital Surat's polishing units had extended its vacation period in December last year and halted imports of rough diamonds on the call of its apex industry body.

Surat's diamond industry recovering

Image: model displays a diamond believed to be the world's biggest coloured Forevermark diamond.
Photographs: Arko Datta/Reuters

The import of rough diamonds was halted between November 25 to December 26 to avoid stock piling, industry sources said.

As per estimates of the state government, there are about 6,547 diamond processing units employing about 700,000 in the state, out of which Surat contributes to 38 per cent units and 57 per cent of the workforce.

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