Diamonds are not forever

Rs 54,793 crore India8217;s exports of gem and jewellery for April-October 2008 as against, Rs 48,379 crore in the same period last year, a rise of 13.26 per cent

Economic theories say that the magnitude of slack demand for luxury items is not as acute as essential goods in recessionary times.

However, the wisdom of yesteryear seems to need a bit of tweaking in the present day scenario. After luxury cars, it is the turn of diamonds to face the brunt as demand slows down globally.

Five-day week

Many associations of diamond polishing and cutting units in Surat 8212; the nerve-centre of diamond business in India 8212; have decided to go slow as the business outlook looks dull. A number of associations of such units have decided to work five days a week till January 2009.

No imports

The decrease in demand has been a serious blow for diamond exporters as they are considering not only a five-day work schedule but a complete stop to import of rough diamonds. On the call of apex body Gems and Jewellery Export Promotion Council, diamond polishing and cutting units across the country, will not import diamonds between November 25 and December 30

How it works

Industry has sufficient rough diamonds in stock to minimise the impact on labour force. The move will basically cause fewer roughs to enter the diamond pipeline and the producer companies will thus indirectly share the financing burden and contribute to a faster restoration of normalcy in an otherwise healthy business, says GJEPC chairman Vasant Mehta

Diamond associations have taken a decision to open the units five days a week for atleast two months so that there are no layoffs in the industry and the existing inventory can be utilised.

8212;CP Vanani, president, Surat Diamond Association

Such import stoppage will help the industry face the challenge that has arisen out of turmoil in the global financial market. This will also send a signal to the banking system that the diamond industry will not increase its indebtedness

8212;Vinu Jognani, president, Ahmedabad Diamond Association