India’s Polished Exports Down 24%

With close to $20 billion a year at stake, the diamond industry in India has taken a big hit, and, depending on what reports you read, anywhere from 250,000 to about 350,000 jobs have been lost.

One problem with the figures are the estimates for diamond workers in the area are so wide, that it's hard to really know how many jobs are lost, where there really isn't any idea how many there were in the first place. Estimates are that between 400,000 and 600,000 people were working in the industry, with about 200,000 left.

Surat City, which is not only the hub of diamond cutting in India, but in the world, has suffered tremendously from the slowdown, and students preparing to take a job in the sector are obviously concerned over whether there will be one when they leave school.

For the quarter ending March 31, 2009, according to Rapaport, India’s polished exports plunged 33 percent to $2.8 billion, while polished imports fell 12 percent to $1.6 billion. The country’s rough imports dropped 71 percent to $738.6 million, and its rough exports declined 5 percent to $164.7 million.

Most of the decline in exports has come from drying demand in the U.S. for small diamonds. Exports of diamonds to Europe has also dried up.

As usual in these difficult economic times, business is looking to the government to bail them out, and as usual it won't work.

The diamond industry in India has asked the government to continue offering interest free loans to manufacturers of diamonds, with the misguided belief it will stimulate the industry.

That's also a false assumption, as all markets are based upon consumer demand, and if demand isn't there, it doesn't matter how much a government gives to any industry, it won't increase sales.

For now, this business trend will continue to go on like it has, and until the global economic situation changes, that'll remain the same for the India diamond industry and the Surat region.