Ahmedabad: Diamond industry in Surat has come under the grip of global economic slowdown owing to drastic fall in orders from the US and European countries.
Global meltdown has pushed the industry in the brink of “recession” as 98% manufactured diamonds are exported to the US and European countries, a diamond industry representative said.
“We have not received orders this time as we used to during Christmas. This unprecedented slack in demand has forced us to shut our units and go for 40 days vacation,” Chairman of Gems and Jewellery Export Council and President of Gujarat Hira (diamond) Bourse, Chandrakant Sanghavi, said.
The US and the European countries are the two largest markets for cut and polished diamonds from India.
According to Sanghavi, the demand for diamonds peaks during Christmas as people in the US and European countries buy jewellery during this season. However, this time even existing orders have been cancelled owing to recession in the economies.
“US accounts for around 60% of total export of manufactured diamonds. However, due to slowdown in the market there, demand was reduced to almost half last year and the decline continues further,” former President of Surat Diamond Association, Pravin Nanavaty, said.
He added there is no sign of recovery or improvement in the market as US economy continues to remain in turmoil and there is no alternative to the US market.