Surat diamond hub stares at Rs 8,000 crore loss

The festive cheer for the gems and jewellery sector has come to an end in January with exports declining 9.17 per cent to $29.6 billion. Exports in the first 10 months of this fiscal year fell 5.68 per cent to $30.66 billion.

With the coronavirus outbreak, prospects for the sector look dim with a key event to promote gems and jewellery in Hong Kong bei ng postponed. While cut and polished diamond exports continued their downward journey, one of the best performing segments – gold jewellery exports – also fell in January by 2.96 per cent to $889.10 million.

The Surat diamond industry is likely to face a loss of around Rs 8,000 crore in next two months as Hong Kong, which is a major export destination, has declared a state of emergency due to the coronavirus outbreak in China. Hong Kong is a major business hub for the Surat diamond industry, but schools and colleges have been closed there till the first week of March and even the businesses are seeing a dip in view of the outbreak of the novel coronavirus.

According to Gems and Jewellery Export Promotion Council (GJEPC), polished diamonds worth around Rs 50,000 crore are exported from Surat to Hong Kong every year. If the situation does not improve, it will have a huge impact on the Surat diamond industry, which polishes 99 per cent of all rough diamonds imported in the country.

To add to the woes, there is a possibility of cancellation of an international jewellery exhibition in Hong Kong, to be held next month, due to the coronoavirus scare, which would hit the jewellery business in Surat. Orders are also placed at the event and the entire year’s manufacturing targets are set, based on the response that Surat diamond traders get there.

Shekhar Ghosh is a communications consultant and and former journalist, who has edited and written for publications such as like Business India, Business Standard, Business Today and Outlook.

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