World’s largest diamond industry faces unemployment issue post import duty hike in India
- One in every five diamond worker in
Suratmay lose his job because of weak market trends.
unemploymentissue arises due to the import duty hikeby the central government to narrow current deficit account.
- The industry was already struggling with low global demands and Asian currency fluctuations lately.
Following the increase in import duty, the Indian
The unemployment challenge comes in with a weak demand for diamonds in the global market due to the US-China trade war. Surat’s diamond industry - which employs over 4.5 lac workers is likely to lose around 1 lac job in the next two quarters.
In order to absorb the widening
Import of cut and polished diamonds have plummeted to ₹5,289.35 crore in FY 2018 which is 32% less in than the previous year. The industry was also negatively impacted by the Nirav Modi scam and that has made it difficult for the industry to balance liquidity. The companies do not have sufficient funds to ensure their sustainability either.
This is not the first time that a decision made by the Modi-government has had an adverse impact on the diamond industry. Earlier, the industry was struggling because of the ban levied on the use of 500 and 1,000 currency notes in India.
Surprisingly, despite India marking its presence among the top 100 economies when it comes to ease of doing business, the traders working at Surat’s diamond manufacturing unit have not been having the best of runs.