Many stories have been told about Surat from history, but the latest being of this once quaint town famous for its textiles industries, now grown into a bustling town known globally for its diamond cutting and polishing (c&p) industry. Old timers however trace the beginning of the c&p sector to a Surat entrepreneur, who brought in a handful of diamond cutters from East Africa more than a century ago to train the Indian cutters. Though the polishing industry came to be established in 1901or so, it was much later, say in the 1950s, that it slowly began to grow. The industry however gained momentum in the 1960s running into the 70s with gusto with its ability to cut low-quality rough diamonds, which the other centres like Israel, Antwerp etc would not touch. Thanks also to the US market which turned out to be the biggest market for the small diamonds cut and polished in Surat.
[two_third]From here, there was no looking back for Surat which met aphorized into this vibrant and flourishing sector, not only as a major employment generating industry but particularly relevant for foreign exchange earnings through export for the country. During this period, one lost count of neo-millionaires and billionaires, who thankfully did not rest on their laurels. The successful diamantaires pushed ahead to grow bigger and bigger…expansions, upgrading into larger stones, massive exports leading to global presence, vertical integration to jewellery manufacturing , the works was the order of the day. There was no stopping this c&p sector and can be easily said to be the beginning of ‘another’ era for the Indian diamond industry. Soon, India began to be recognized as the world’s largest diamond cutting and polishing hub and still growing…[/two_third]
“Soon, India began to be recognized as the world’s largest diamond cutting and polishing hub and still growing.”
Today, Surat boasts of numerous large factories equipped with sophisticated high-tech machines and works on technology on par with or even better than other cutting centres worldwide. In fact, Surat progression to process bigger stones better and at much cheaper price is considered to be the downfall of cutting industry in Israel and Antwerp. Quick at absorbing newest technology into their factories, Indian diamantaires are always on the lookout for bettering their manufacturing process or training their workers. This is one of the major reasons for the success of the c&p sector… the sector’s adaptation to new changes.
Unfortunately, like any other industry, the Surat diamond industry has been mired with problems due to the global meltdown. Because in the slump in the developed economies, business has been slow and it had a serious impact on the diamond workers. Rough shortage, Rupee slide etc too had its adverse effect on the factories and industry at large. But, the Indian diamond industry on the whole is known for its resilience and market watchers feel it will survive, as it always did in the past overcoming many hurdles.
One recalls the not-so-happy days starting October 2008, when the city of Surat presented a rather gloomy picture and the condition of diamond workers had become appalling. The gravity of the crisis was such that for the first time in the history of Surat the industry had to ask rough suppliers to cut supplies. Many manufacturers closed shop by downing their shutters as they were under the grip of global meltdown. Normally, before the Christmas season, diamond traders stocked large amount of diamonds in anticipation. However, with the US was facing a severe economic crisis at that time and the sale of diamonds fell sharply by 20 per cent. As is well known, America is the largest diamond market in the world and consumes half of the world’s polished diamonds. So, due to US meltdown, the diamond cutting and polishing industry of Surat had to endure a severe impact. The industry’s performance suffered and in February 2009. The Indian gems and jewellery export reduced by 35% to $1222 million compared to the export figure of $1,867 million in February 2008. Out of the 700,000 skilled workers were attached to the diamond sector in Surat, more than 250,000 were laid off. The Surat c&p sector has weathered such storms but the ‘never-say-die’. sector was soon seen striving for a comeback. Eventually, with renewal of good demand from US and other overseas consumer markets, the c&p sector was on its feet again and raring to go.
[two_third]As of today, around 10000 Diamond processing and trading units are spread across the state of Gujarat with the city of Surat alone houses more than 5000 units. In addition, Surat’s infrastucture has improved adequately over the years with the city offering a convention centre, which is of international standards. Soon Surat will have Diamond Park and Gems & Jewellery Special Economic Zones. Though Surat is known as a Diamond cutting & polishing hub, it is fast developing into jewellery manufacturing hub too. The city has easy connectivity by rail; and air from Mumbai, Jaipur, New Delhi. There is air connectivity available from Kolkatta, Chennai, Kochi and Coimbatore via Mumbai. The SURSEZ, (Special Economic Zone) is 30 minutes from Surat City, comprising of 100+ Gem & Jewellery manufacturing units. Currently, 92% of the world’s diamonds are cut and polished in Surat, the city is growing fast and by 2020 it is estimated that Surat will be the largest city in Gujarat State.[/two_third]
“Currently, 92% of the world’s diamonds are cut and polished in Surat.”
The small and medium diamantaires in Surat are currently facing problems with skyrocketing rough prices as well as the weak Rupee; and there is little hope of recovery until maybe 2018 when the global rate of rough diamond production will rise by 4.8 per cent every year. Since January 2013, rough prices have increases by 10-15 per cent hike and when the rough diamond reaches the secondary market, the small and medium units owners have to buy the stones paying premium of 4-5 per cent. This has hit the medium and small units owners badly, is no profitability on polished. Some small units are reported to have downed their shutters too till better times.
Incidentally, India imports rough diamonds to the tune of $11 billion per annum. About 80 per cent of the diamonds are imported from big diamond mining companies, while the rest come from Antwerp. India is the world’s largest hub for cutting and polishing of diamonds wherein the cutting and polishing industry is well supported by Indian Government policies the banking sector is also facilitating nearly US$ 3 billion of credit to the Indian diamond industry. Indian diamond manufacturing units, known for polishing 11 out of 12 diamonds in the world, enjoy an annual turnover pegged at about Rs 80,000 plus crore.
Having said that, it’s time to see Surat’s c&p sector position as it resumes diamond production post Diwali holidays. While the larger factories as well as other units have been opened for many days, manufacturing is reported to be below capacity. Most workers are yet to return from their villages. Rough shortage is easing out a bit, but margins still seem to elude the businessmen. After EU’s decision to lift sanctions on ZMDC, Antwerp firms can now sell to manufacturers in India and other centres. This development on the ‘rough front’ has brought some cheer to the Indians. It is said that only the diamond workers in Surat have the expertise of manufacturing Zimbabwe diamonds due to their size and colour. Therefore, most of the rough that would be imported by Antwerp will come to Surat for cutting and polishing.
The 5000 odd manufacturing facilities which dot the city of Surat have all been instrumental in making the city it is today.