The gems & jewellery industry, particularly polished diamonds was already going through a rough patch even before the spread of coronavirus. The diamond industry in India where 95 per cent of the diamonds get cut and polished has braved many blows in the form of demonitisation, scandals, liquidity crunch and more, which have all aggregated together, putting the industry in a tough spot over the last 4 years. Now, with coronavirus, the industry is sinking to a new low because of the decline in diamond shipments to countries like China, Hong Kong, and USA, where India exports 80 per cent of its polished diamonds.
Exports has declined across categories in February – cut & polished diamonds by 40 per cent, coloured gemstones by 64 per cent and plain gold & studded jewellery by 55 per cent. Banks have come to the rescue of exporters by extending the credit line by 10 per cent. The RBI like with other industry has also issued a 3-month moratorium on term loans and cut its repo rate to its lowest level since 2004.
Though the industry is set to benefit from all these measures, the extent to which the industry will be affected because of the pandemic is uncertain as its plight also depends on the progress the other countries make in the next few days. The impact the virus has had on the workforce in the diamond industry is also huge. Around 12 lakh people are employed in the diamond industry in Surat alone, many of them have migrated back to their hometowns because of the fear of catching the virus. Though many have been promised their salaries during the period of lockdown, the condition of those who work in small-scale diamond manufacturing units remain uncertain.