Geopolitical tensions between Russia and Ukraine have already hit the post-pandemic recovery for major economies, triggering a global recession. Although India has been doing better than most countries, rising commodity prices and lower demand from global markets, also takes a toll on earnings in the country. Due to another flare up between US and China over suspected spy balloon, India's diamond exports have been hit, forcing polishing units to reduce capacity by 40 per cent.
Diamond cutting and polishing operations have taken a hit, since Hong Kong and China make up 30 per cent demand for precious gems from India. The slowdown has come over the past three months, and has been worsened due to the renewed US-China tensions. Diamond units in Surat have also reduced working hours, which means they are only operational for four to five days a week.
The gross exports going out of the city's diamond industry have also taken a 28 per cent dip between December for FY22 and FY23. Surat's diamond units polish almost 80 per cent of all diamonds, which are sold across the globe. In December 2022, about 20,000 diamond workers had been laid off in Surat, and before that 2.5 lakh had been sent on leave last Summer, after the Russia-Ukraine war broke out.
