Surat: Savji Dholakia, the celebrated chairman of Shree Hari Krishna Exports, often referred to as the “Diamond King,” is renowned worldwide for his lavish gifting to his most efficient diamond artisans. During the festive season of Diwali, it has been a long-standing tradition for Dholakia and his company to bestow cars, jewelry, and even apartments as bonuses to these talented artisans. However, for the first time in many years, Dholakia’s diamond empire has decided to forego these gifts due to the ongoing recession in the diamond industry.
The global diamond industry is facing economic challenges, primarily driven by the Russia and Ukraine conflict. Furthermore, G7 countries are advocating for a ban on Russian diamond imports into India. A noticeable economic downturn in the United States, the largest diamond consumer market, and China has added to the industry’s woes.
Diwali bonuses are a highly anticipated tradition in the diamond industry. Employees and artisans eagerly await these gifts from their owners as a token of appreciation for their hard work and dedication. Shree Hari Krishna Exports, like other major players in the industry, has consistently followed this tradition. However, the current state of the diamond industry has prompted a change of heart.
Pintu Dholakia, director of Shree Hari Krishna Exports, explained the decision, stating, “When the industry is going through a tough phase and recession, we can’t encourage our employees with costly gifts while diamond artisans in other companies and units are not receiving Diwali gifts. It is a challenging time for the entire diamond industry.”
In Surat, where a significant portion of India’s diamond manufacturing takes place, most companies and factories have reduced their operations to just five days a week. Many small diamond units have even announced early Diwali vacations due to the prevailing difficulties, including the issue of overproduction, which has forced diamond unit owners to scale down production drastically.
In a collaborative effort to address the challenges faced by the Indian diamond industry, the Gems and Jewellery Export Promotion Council (GJEPC) and prominent diamond associations have issued an unprecedented appeal. They are urging the Indian diamond industry to voluntarily suspend the import of natural rough diamonds from global mining companies for a period of two months, starting from October 15 to December 15, 2023.
Key organizations behind this appeal include the GJEPC, Bharat Diamond Bourse (BDB), Surat Diamond Bourse (SDB), the Mumbai Diamond Merchants Association, and the Surat Diamond Association (SDA). The goal of this move is to halt the import of rough diamonds, allowing diamond manufacturing to continue without interruption. It also seeks to ensure support for the artisans, preventing any adverse impact on their livelihoods.
One of the main issues prompting this appeal is the significant decline in demand for loose polished diamonds and jewelry, primarily from major consumer economies like the United States and China. This prolonged demand slump has resulted in a 25% decline in India’s diamond exports from January to August 2023, which continued into September. As a consequence, polished diamond inventories have swelled, leading to softer diamond prices due to a supply-demand mismatch.
