From Surat's diamond industry to Ahmedabad's dyes and pigments businesses, exports have been impacted by economic slowdowns and geopolitical factors
As the world celebrates MSME Day on June 27, all is not well with the micro, small and medium enterprises (MSMEs) in Gujarat. Especially the diamond industry in Surat. A major contributor to India’s gem and jewellery exports, the diamond industry employs around 8 lakh people and accounts for exports of about Rs 3 lakh crore. Demand in the industry has been significantly impacted due to reasons such as global economic slowdowns, mainly in China, which is one of India’s biggest diamond export markets, and also the Russia-Ukraine war, which has stopped the import of rough diamonds from Russia. Recently, the G7 group of nation’s decision to put fresh sanctions on Russian diamonds has put the jobs of diamond workers in Surat at stake.
In the past three months, eight diamond workers in Surat have died by suicide, and about 15,000 of them have been laid off, while the industry's losses have increased from 1 percent to 15-20 percent annually in the last five years, The Print reported.
A recent analysis by global analytics company Crisil said that MSMEs, accounting for approximately 40 percent of India’s exports, will face headwinds from the imminent economic slowdown in advanced countries, particularly in the US and the Eurozone; these two geographies account for a third of India’s overall exports.
Nikit Agarwal, director and CEO of Surat-based Amantran Jewels, agrees. It has seen an almost 40 percent decline in exports in the last three years. The 25-year-old company exports its diamond jewellery to the US and Europe. “Currently, we’re focusing on the domestic market, which is doing fairly well. We have also forayed into lab-grown diamonds because their demand is gradually catching up in the international market. The government is also supporting it more,” says Agarwal.
Between April 2022 and March 2023, the overall gross exports of cut and polished diamonds stood at Rs 1.76 lakh crore, down 2.97 percent compared to the same period in the previous year, which was Rs 1.82 lakh crore.