State Of The Economy 2020

Dimming lustre in Surat's diamond industry | State of the Indian Economy 2020

Surat, a hub in the global diamond industry, finds higher prices and lower incomes are driving people away from the ‘forever’ stones

A diamond is forever. This marketing slogan from 1948, from the biggest diamond house in the world De Beers has come to be accepted as gospel. Earlier the stone was considered a luxury, but the ad campaign made it a must-have for anyone promising eternal love. It did wonders for the industry, which is today worth more than $80 billion, and Surat is an integral part of it. It cuts and polishes nearly 90% of the diamonds globally. The city’s Rs.1-trillion industry runs on 5,000 odd units, which employs upwards of 600,000 people. 

Fresh piece aaya hai,” says an excited Chandrakant Tejani, director, JR Exports and his father immediately gets to studying the small piece of stone placed on his table. The traffic din in Surat’s Mini Bazar is merciless and conversing over it is trying. It is difficult to reconcile the cacophony with the commercial centre’s formidable reputation in the international, luxe market. Tejani shuts the window before turning the air conditioner on. 

Tejani represents the quintessential Gujarati businessman. The 47-year-old is a third-generation entrepreneur with a sharp understanding of the business. He travels extensively and is tight-lipped about his revenue. “Business was not very good till last September. Post Diwali, it has really taken off,” is all he says. The fresh stone on his table is a 1.3 carat piece and will sell for Rs.700,000-800,000 in the market. Tejani believes growth will continue for a while before taking a turn for the worse. According to industry reports, festive season in the US and Europe coupled with units slowing production in Surat boded well for the industry in the last two months of 2019. But although Bain & Company expects India’s long-term growth in this space to remain intact, it stated in its latest report that, “Ongoing currency fluctuations and short-term policy changes in India could disrupt that country’s potential, as they have in the past.” Teja

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