Diamond manufacturers in Surat, Amreli, Bhavnagar and Ahmedabad are reported to have halved their production capacity following a sharp fall in prices of polished diamond and to prevent the build-up of excess inventory in a slow, depressed market. Melee prices are reported to have fallen as much as 25 percent since the beginning of this calendar year.
About 20 percent of the 4,000 diamond polishing plants in Gujarat have not reopened after the recent summer vacation. These units employ over 450,000 workers. The production cut over since January is estimated to be worth $4.2 billion. The Times of India (ToI) reported that most of the diamond units, especially the small units operating less than 20 polishing wheels, have cut production by shutting down 80 percent of their machines.
ToI quoted Surat Diamond Association (SDA) president Babu Gujarati, saying that "demand of polished diamonds in the global market is very poor due to trade war between China and US. Further, the rough diamond prices are at all time high, which has reduced the profit margin of the polishers." Jaysukh Gajera, president of Surat Ratnakalakar Sangh, an association of diamond polishers told ToI, "The issue of wages is going to be a big issue in the coming days as the diamond manufacturers have drastically reduced work. We have started getting complaints of the workers being paid less. But, we can't do much as the crisis is omnipresent."...