Over 100,000 people laid off in India’s gems, jewellery sectorDecember 26th, 2008 - 5:48 pm ICT by IANS
Surat, Dec 26 (IANS) More than 100,000 people have been laid off in recent months by the gems and jewellery industry in India because of the global slowdown in demand and lack of adequate credit, an industry leader said in this hub for the sector in Gujarat.”This is for the first time in four decades that the diamond industry is facing such a severe liquidity crunch,” said Mehul Choksi, director of the leading gems and jewellery manufacturer and exporter Gitanjali Group.
“Around 100,000 people have been laid off recently,” Choksi, who also heads the gems and jewellery committee of the Federation of Indian Chambers of Commerce and Industry (Ficci), told reporters here.
“But it won’t be a complete layoff as some diamond cutting and polishing units have started functioning,” he said, adding that some 10,000 units that cut and polish diamonds were closed for a month because of lack of buyers.
The recession in the US and Japan and slowdown in several countries have forced the $50-billion gems and jewellery industry in India to cut down production by over 25 percent. The industry employs close to 1.5 million people.
In November, exports of gems and jewellery from the country were down 34.25 percent. Exports of cut and polished diamonds were also down a little over 20 percent, compared with the same period last year.
In fact, based on the recommendations of Gems and Jewellery Export Promotion Council under the commerce ministry, the diamond processing industry also agreed to a one-month moratorium on the import of rough diamonds.
India cuts and polishes around 90 percent of the rough diamonds produced globally, and Surat alone accounts for nearly 70 percent of this industry.
“We are passing through a very rough phase with employment of miners and those polishing gems at risk,” said Amit Mitra, secretary general of Ficci.