Diamond industry in Surat, one of the main sources of foreign income and livelihoods of millions of people, has reached a difficult time . A number of polishing units are in the grip of recession, fear of closure is looming large for some .
A decrease in external demand and stagnating prices of polished diamonds that against the rising cost of raw stones is the culprit .
"The overseas demand is very low and there is no increase in prices of polished diamonds, if compared with (the increased prevalence) of rough diamonds from 2014," president of the Association of Diamond Surat Dinesh Navadia told PTI .
Navadia called the descent as "unprecedented".
"This happens quite a time, but after three or four months, usually improves the situation . This time, the crisis has lasted a long time," he said, adding that the rumors are only worsen the situation .
While Godhani Gems, a unit of diamonds with 1,500 employees, has closed shop, has about 25 units gone bankrupt, he said .
On the situation of workers of diamonds, Navadia said it is difficult for unskilled or semi-skilled to find jobs in a recession workers .
Aniruddha Lidbide analyst diamond trade, could not agree more. "It is much less demand (of polished diamonds) of China, Southeast Asia, the Gulf, Europe and the United States. Because of that, a lot of inventory remains with the diamond industry," says Lidbide .
"The prices of roughs (rough stones), which is the raw material for cut and polished diamonds, has risen to 65-70% in three years . Prices of diamonds in the same way, has not been polished gone up . It is stagnant, so the profit margin was very thin, "Lidbide said .
Moreover, some of the owners of the diamond industry have diverted money to other companies, which also harms (industry) he said .
"In recent years, most of the diamond industry has reoriented its economy to another business . They have invested mainly in the real estate industry, and also in the stock market or trade in oil and currency" , Lidbide said.
He said it was difficult for Surat diamond traders to obtain credit from banks, which also add to the problem .
"Many companies suspended after 2008, and one of the main among them was Vicente diamond . In 2013, to pay a sum of Rs 4,500 crore and has left the country . A very strong for many banks blow was given . Some 12 13 banks had been funding diamond Vicente "Lidbide said, adding that the default of many others have forced a depreciation of about Rs 8,000-10,000 crore in the last 3-4 years .
"More than that, the financial main bank, Antwerp Diamond Bank Belgium closed its operations on June 13 there is also a big blow to the diamond industry, as it was an important source of funding," he said .
Synthetic diamonds that are very similar to the original, produced mainly by Russia and China, have also affected the company, Lidbide added .
"Those who have worked with 100% capacity has now reduced its activity by 50-60%, depending on usage and inventories they have," he said .
Chairman of jewelry and stones Export Promotion (GJEPC) Sanghvi Chandra was also on the same page .
"International demand for polished diamond has decreased, which has created the situation of decline . This may continue for 3-4 months," he said .
"We have known a recession that many times, but we left it," he said .
Pravin Nanavati, owner jewelers based in Surat She also blames the fall in exports for the current state .
"About 90% of the diamond business is based on exports . But as foreign demand declined in the last couple of months our industry slowdown," Nanavati PTI .
He also said that synthetic diamonds make people doubt in buying fake diamonds .
"The government should establish a single university for the diamond industry, offering courses development and human resources management," he suggested .
Since hundreds of thousands of people who depend on the industry, Nanavati said "this is the time that the government took measures in the interest of one of the industries that produce higher incomes."