40% diamond units in Botad have shut down due to to recession, more to follow after Navratri: Traders
Surat Diamond Association president Jagdish Khut said the industry was somehow surviving and running the factories till Diwali.
4 min read
If the unfavourable situation continues, a majority of the factories in Botad will be forced to shut down after Diwali. (Express File Photo)
More than 40 per cent diamond factories in Botad have shut down while another 20 per cent will follow suit after the Navratri festival due to recession in the sector, according to industry estimates.
According to Botad Diamond Association President Shanker Dholu, there are nearly 1,300 to 1,500 diamond factories in Botad town and villages that employ more than 70,000 people. “The diamonds that are cut and polished are also sold in the diamond trading market in Botad, while some of the traders go to Surat. Since the last few months, the industry is going through a bad phase. Over 40 per cent of the small and medium factories have shut down in the last couple of months. After the Navratri festival, 20 per cent more factories will be closed due to poor demand for polished diamonds,” he said.
There has been a drop in demand for polished diamonds in the international market and a crunch in the supply of rough diamonds in the aftermath of the sanctions imposed by the US on the Russian government-owned Alrosa Diamond Mines following the Russia-Ukraine war.
Dholu cautioned that if the situation is not favourable for the diamond industry after Diwali, a majority of the factories in Botad will be forced to shut down. Currently, many diamond factory owners have reduced their working hours.
Echoing similar views, Surat Diamond Association president Jagdish Khut said the industry was somehow surviving and running the factories till Diwali. “The diamond factory owners have cut short the working hours in Surat. The economic slowdown in China and the US, Russia-Ukraine war, and now, the war in Israel are important reasons for the recession. There are over six lakh diamond polishers in Surat and over 5,000 small, medium and big factories. We are hopeful that after Diwali, the situation may turn favourable. Demands and inquiries from the US for the Christmas sale are yet to be generated,” said Khut.
Botad resident Manish Patel, who runs three factories, had to down shutters of his two factories last month. Currently, there are more than 100 diamond polishers working in his single unit.
“Since the last couple of months, there is no major demand for polished diamonds in the markets in Surat and Botad, and even traders want to purchase polished diamonds at lower rates. We have not seen such a recession in the industry so far. I had to lay off more than 100 diamond polishers in my two factories as I could not run the factory. Currently, we are surviving with less work and have stocked the polished diamonds. We hope that after Diwali, if the situation turns normal and demand improves, we will get to sell the diamonds. Else, we will shut down the factory,” Patel said.
Meanwhile, the adverse situation has forced Botad AAP MLA Umesh Makwana to write to the state government Tuesday seeking an economic package for the diamond polishers.
In the letter addressed to Chief Minister Bhupendra Patel, Makwana has urged the state government to bring diamond polishers under the ambit of the Vishwakarma scheme that offers financial assistance as well as training, information on advanced techniques, and skill-related guidance to small workers and artisans. “The families of such diamond polishers should be given a loan of Rs 3 lakh without interest. An economic package should be declared for them, to support them in this critical situation,” the legislator stated. He also sought a similar compensation for cotton growers who are facing heavy losses due to the heavy rainfall.
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