For both polishing unit operators and diamond merchants, the US is still the biggest export destination: Three in every 10 diamonds polished in India end up in American stores.
The impact of GST is particularly stark in the highly fragmented synthetic textile industry, which attracts different GST rates at different stages of production and sale
The industry alleges the government has been apathetic, despite their pleas for quick action. However, H2 may be different as The US-China trade war had opened a window for Indian exporters to ship more to America.
Though exports to Hong Kong, a major destination for India's polished diamonds, have resumed, the industry is currently sitting on an inventory worth around $2.3 billion.
Gitanjali Gems and Firestar Diamonds together account for 5.8 per cent of the diamond and jewellery trade in India.
Since most banks have tightened lending to diamond merchants and others are about to do so, many medium and small diamond dealers are approaching large players for credit facility within the industry
Blocked working capital worth Rs 1,500 crore, in the almost-defunct job work diamond polishing units, is expected to be released even as diamantaires will issue fresh orders to such units following the GST relief.
Diamond exporters are considering stopping the import of rough diamonds.
The sector employs around 1 million skilled and unskilled workers directly and indirectly and decline in exports is a major worry for participants in the value chain.
Recent defaults have made a section of traders contemplate moving towards promissory notes.
When the lockdown was lifted last year, Rasikbhai Kotadiya, who runs a powerloom unit in the Kim-Pipodara industrial area on the outskirts of Surat, was left with only four workers out of the 48 that he used to employ to run his 128 looms. Though the economy had been unlocked, his textile unit, and that of thousands of others, struggled to resume operations. By the last week of May, nearly 700,000 of Surat's 1.2-1.5 million migrant workers, left high and dry with no pay during the lockdown, had returned home. In Laskana, another textile weaving hub in Surat, the powerlooms were all but silent, with only 2,000 of the total 55,000 looms churning out grey cloth at a snail's pace.
Contract finally given for Rs 2,400-cr project, with GIFT City-like features
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