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Rediff News  All News  » Business » Diamond jewellery sector lays off 15% of workforce

Diamond jewellery sector lays off 15% of workforce

January 17, 2014 14:19 IST

Photographs: Denis Balibouse/Reuters Dilip Kumar Jha in Mumbai

In recent months, the Indian diamond processing sector has laid off 15 per cent of its workforce on weak demand from domestic and foreign markets.

Half these are seeking alternative livelihoods, with some opting for the textile and agriculture sectors.

The diamond processing sector spends substantial sums on training.

From a million three-four years ago, the sector’s workforce has declined to 600,000-650,000. In the last few months, it has laid off 80,000-90,000.

“The majority may not return  the sector and this poses a threat to the sector.

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Diamond jewellery sector lays off 15% of workforce

Image: An employee of Sotheby's auctioneers displays the Beau Sancy diamond in Zurich, Switzerland. The historic 34.98 carat modified pear double rose cut diamond, which has an estimate of $2-4million, goes on auction in Geneva.
Photographs: Arnd Wiegmann/Reuters

“When it revives, skilled workforce will be a big problem,” said Pravin Nanavati, secretary, Gujarat Heera Bourse.

Domestic demand slowed after a weak Diwali season. A couple of months ago, the sector had expected government support to increase the availability of gold through a duty cut of two-eight per cent.

“Though, we have seen a slight revival in demand in the last few weeks, labour and raw material shortages have been major hurdles,” said Mehul Choksi, chairman and managing director of Gitanjali Gems.

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Diamond jewellery sector lays off 15% of workforce

Image: 'Summer Storm', a white gold necklace with four pear-shaped and six round diamonds valued at $750,000, in Antwerp, Belgium.
Photographs: Francois Lenoir/Reuters

Vipul Shah, chairman of Gems & Jewellery Export Promotion Council, had estimated a slight rise in demand for a short period on the wedding season and rising imports of rough diamonds.

Data compiled by GJEPC showed a 17 per cent rise in imports at 108.9 million carats in April-November 2013 against 93 million a year ago.

The government had restricted gold imports by introducing the 80:20 rule -- at least 20 per cent of the imported gold had to be supplied to exporters.

The exports market, however, is yet to respond positively. In the first eight months of this financial year, jewellery exports fell 8.8 per cent to $22,989.6 million compared with $25,574 million a year ago.

Source: source