Surat diamond industry sitting on $2.3 billion inventory faces trouble due to lockdown

In the month of January and February this year, Surat's famed diamond industry witnessed a drop of export worth almost $1 billion, compared to last year. As March and April passed without any consignment moving to its destined markets abroad, the diamond industry in the country is sitting on an inventory worth around $2.3 billion.

"We have an inventory of $2.3 billion dollar in the whole of diamond industry and we really don't know how much time it will take to export them back to the markets in Hong Kong, China, Europe and the United States. We couldn't export anything in March and April due to international flights grounded and markets closed," said Dinesh Navadia, regional chairman of Gems & Jewellery Export Promotion Council or GJEPC.'

The global lockdown following coronavirus outbreak has hit Surat's diamond industry hard. Known for being one of the biggest markets of cutting and polishing rough diamonds, the industry remained shut for nearly 40 days and exports halted as country after country started shutting its borders to curb the lethal virus. The situation has only worsen in Surat, that has nearly 80 of market share in the country, where the industry was already limping due to global slowdown, unrest in Hong Kong due to pro-democracy protest, and trade war between China and the US.

"In the past couple of days, 32 consignments have been exported from Surat Diamond Bourse but it is nothing compared to the stock that has been piled up in last 40 days," Navadia told DH while adding that "unless all international markets open, situation won't improve".

However, resumption of production seems bleak in view of the lockdown in Surat city and workers moving home. A large number of workers have already left for home, while many are still agitating to be allowed to travel back home. Most of the cutting and polishing factory fall under red zone of coronavirus where operation cannot resume.

"Even if government allows with a condition of using only 30% work force to maintain social distancing, most of us wouldn't start factories in a situation where we will have to use 100% of infrastructure but only 30% of manpower will be available which is not viable to run production," said a factory owner.