Slowly but gradually, the diamond-cutting and polishing industry in Surat is regaining its lost sparkle. Around 500 more units in the diamond city have resumed operations in the past month, as a result of which diamond units are looking for workers again.
Last year, some 400,000 diamond workers in Surat lost their jobs owing to the global recession that shattered the state's Rs 50,000-crore industry.
"Surat had 2,500 to 3,000 diamond-cutting and polishing units operational before Diwali. However, only 1,000 units were able to start operations after the vacation," said CP Vanani, president, Surat Diamond Association. Confirming that 500 units had re-opened this month, he said 1,500 units were now back in business.
Lack of raw material stocks of rough diamonds and an improvement in domestic demand prompted closed units to restart their operations.
"Most of the units that restarted operations after Diwali cleared the raw material stock with them by incurring losses. So there is no stock in the pipeline currently and units are now buying raw material as trading activities pick up," added Pravin Nanavati, former president, SDA.
As a result, trading has also resumed in Mumbai and Surat. "Prices of rough diamonds have surged 20 per cent recently. Though polished diamond prices have not improved as much as those of rough diamond, there is a great deal of optimism that prices of polished diamond would firm up in the days to come," Vanani added, saying he anticipated a pick-up in demand in the days to come.
Ninety per cent of the diamonds cut and polished in Surat are exported. "Recession has not hit India as much as it has impacted the US and other western countries," said Nanavati.
He pointed out that Indian consumers have started buying diamonds for investment purposes, a change from their earlier habit of buying only diamond jewellery.
The situation is still far from being favourable to the diamond industry. Cutting and polishing units that restarted operations recently are finding it difficult to get workers. All of them are operating with 50 to 60 per cent of their required workforce, since many of those who were laid off shifted to other industries such as textile and agriculture.